The Gunners’ manager Arsene Wenger has told the 30-year-old German World Cup winner that he is no longer part of his plans and is free to search a new club.
Podolski’s exit from the Emirates was looming large following a poor showing last season, during which failed to find the net in seven substitute appearances in Barclay Premier League.
He spent part of last term on loan to Inter Milan, where he netted once in 17 Serie A games.
Podolski had joined the Gunners from German club FC Köln for an undisclosed fee in 2012 and has one year remaining on his contract with the club.
He scored 19 goals in 60 appearances during his stay at the Emirates.
Everton boss Roberto Martinez is looking to strengthen his attacking options ahead of the next season and believes that Podolski fits the bill.
Turkish champions Galatasaray are also rumored to be interested in Podolski and the forward said he will not rush into choosing his next destination.
“If I find the right club, right coach and right environment, I’ll evaluate it,” he said. “If these conditions are met, I think everything is possible.
“The next transfer could be my last, so I have to take a well-thought step.”
Podolski has made 125 appearances for Germany since his debut in 2004 and sits third in list of country’s most-capped players. With 48 goals, he is also the third-highest goal-scorer in country’s history.
He has represented Germany in three FIFA World Cups – 2006, 2010 and 2014.