Unai Emery has been searching for a new full-time club captain after Laurent Koscielny left the club this summer.
BBC journalist David Ornstein broke the news on Twitter earlier on Friday.
“Arsenal head coach Unai Emery has named midfielder Granit Xhaka as the club’s new permanent captain,” he wrote.
“Emery informed the squad of his decision this morning, ahead of Monday’s trip to face Manchester United at Old Trafford.”
Emery is still deliberating over a vice-captain. However it is understood that Lacazette and Aubameyang are the leading contenders.
Xhaka’s appointment is certainly a controversial one.
The Swiss international divides opinion among Arsenal fans.
He’s a player who displays a lot of heart and determination on the pitch but he can be a liability.
Xhaka often makes rash decisions and dives into tackles. This tendency has cost Arsenal in the past, including when his awful challenge inside the box led to a Tottenham penalty earlier this season.
The 27-year-old is currently in his fourth season with the club, having joined in 2016 from Borussia Monchengladbach.
In that time Xhaka has made 139 appearances and scored 11 times.
Xhaka is no stranger to being a captain. He has worn the armband six times already this season for Arsenal and has also captained his country in the past.
Piers Morgan reacted to the news on Twitter, saying he would have picked Matteo Guendouzi instead.
“I’d have made Guendouzi captain,” he wrote. “He seems a more natural leader & more guaranteed his place in the team. Xhaka has a lot to prove.”