Gundogan last played in the 3-0 win against Tottenham in which he scored two goals, only to later suffer a groin injury which forced Pep Guardiola to bring him off.
He missed the midweek game against Everton, though Man City managed just fine, defeating the Toffees 3-1 at Goodison Park.
When asked about Gundogan's fitness on Thursday, Guardiola confirmed that he should be available to play after having taken part in full training.
Man City welcomed Kevin De Bruyne back in the Everton game as he came off the bench with 10 minutes to go, having recovered from an injury that saw him miss the club's previous seven matches.
In a huge game against the Gunners, De Bruyne might be put back into the starting XI, along with Gundogan.
That leaves Guardiola with some choices to make in midfield. Rodri will start in what will be a midfield three alongside the aforementioned pair, which leaves just three spots up front up for grabs.
Phil Foden and Raheem Sterling are pretty much undroppable at the moment, while the Spaniard may opt to start with Bernardo Silva on the right after the Portuguese scored and recorded an assist versus Everton.
John Stones was rested against Everton, but should come back in to replace Aymeric Laporte.
Nathan Ake remains the only major absentee, while Sergio Aguero will again be on the bench.
Arsenal were boosted by a major return during the week, too, as Kieran Tierney made an appearance off the bench in the 1-1 draw against Benfica in the Europa League. Having got some minutes under his belt, the former Celtic man could be named at left-back against Man City, which will mean Cedric Soares dropping to the bench.
Thomas Partey's first year as an Arsenal player has been fractured with injuries and it doesn't look likely that he'll be available for this fixture.
Mikel Arteta named as close to a full strength team as he had available against Benfica, so won't be making too many changes against his former employers.