Reports are claiming that Leicester are in pole position to sign the French striker, who is valued at around £15 million.
Arsenal are currently assessing their transfer options in attack as they seek a potential replacement for Alexandre Lacazette, who is being linked with a move to former club Lyon, or else to Serie A clubs like Inter and AS Roma.
Edouard has had another impressive season for Celtic, scoring 20 goals and providing four assists in 32 games in all competitions, despite the club's struggles in terms of results.
Whilst Arsenal were very keen on Edouard, a report from the Daily Mail has claimed that Leicester are set to sign the 23-year-old striker, as they seek better competition for Jamie Vardy, who is now 34, with Kelechi Iheanacho failing to make a claim as his replacement.
The report adds that Edouard has expressed a desire to play with Brendan Rodgers once again, who signed him twice whilst with Celtic, initially on loan, and then permanently from Paris Saint-Germain for £9 million.
The £15 million fee that Celtic are looking for is much lower than the initial £40 million that they were keen on during the summer, as they now look to gain whatever they can from the transfer with the Frenchman wanting a move away.
Celtic's club chiefs are all confident that Edouard has the ability to be a success in the Premier League, and are looking to add a substantial sell-on clause to his transfer, in order to benefit from a possible big-money transfer in the future.
His current contract with Celtic ends in June 2022, after he signed a four-year contract in 2018.
PSG are also entitled to receive 40 per cent of the transfer fee if Celtic opt to sell him, with this being part of the sell-on agreement that the two clubs agreed on when signing him permanently.
Apart from Leicester and Arsenal, there are other European clubs interested in Edouard, primarily Roma and Aston Villa, yet the Foxes seem to have emerged as the most likely to sign him.
Edouard has a magnificent record of a goal every 134 minutes for Celtic, and whilst he has not been called up for a full international cap so far, he has a remarkable record for France's under-21 team, scoring 15 goals in ten games.