Unai Emery is desperate to add a centre-back to his squad before the transfer window closes on Thursday.
Laurent Koscielny completed his move to Bordeaux this week, leaving Emery short of options at the back.
However, the club's pursuit of Upamecano looks to have ended after Leipzig told the Gunners that they will not sell for less than the 20-year-old's release clause, which stands at £92m.
Upamecano is out of contract in 2021 but Leipzig are still not prepared to let him go for anything other than a world-record fee for a defender.
Arsenal are now set to turn their attention elsewhere as they look to get a deal over the line in the next 24 hours.
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Greg Lea is a freelance football journalist who's filled in wherever FourFourTwo needs him since 2014. He became a Crystal Palace fan after watching a 1-0 loss to Port Vale in 1998, and once got on the scoresheet in a primary school game against Wilfried Zaha's Whitehorse Manor (an own goal in an 8-0 defeat).