The 30-year-old Brazilian escaped to his homeland after a less than successful stint in the Premier League, where the left-sided defender was ridiculed for a number of poor performances.
Gunners boss Arsene Wenger allowed Santos to leave the Emirates Stadium in January, where he has enjoyed a better run of form in the Copa Libertadores.
But, after Gremio's last-16 exit following defeat against Santa Fe, the South American club's director Marcos Chitolina admits that they will not be able to afford to keep the Arsenal reject.
"We signed Andre Santos for Copa Libertadores and his contract expires in July," he explained.
"[But] it would be too expensive for Gremio to renew his contract, he is a very expensive player."
Santos signed a long-term contract with Arsenal when he first signed from Fenerbahce in a €7million deal back in 2011, but with no future in north London, his parent club will surely be looking to offload him again when the transfer window reopens this summer.