Arteta, who made 149 appearances for Arsenal between 2011 and 2016 before joining Manchester City's coaching staff as Pep Guardiola's assistant, replaces fellow Spaniard Unai Emery at the Emirates Stadium.

"This is a huge honour. Arsenal is one of the biggest clubs in the world. We need to be competing for the top trophies in the game," the former Arsenal captain said in a statement on Friday.

"We all know there is a lot of work to be done to achieve that but I am confident we'll do it.

"I'm realistic enough to know it won't happen overnight, but the current squad has plenty of talent and there is a great pipeline of young players coming through from the academy."

Arsenal are 10th in the Premier League table, seven points behind fourth-placed Chelsea, after five victories in 17 matches this season.

They travel to 16th-placed Everton for Saturday's early kick-off.

Emery was sacked last month after Arsenal's 2-1 Europa League home defeat to Eintracht Frankfurt, which extended their winless run in all competitions to seven games, their worst streak since February 1992 under George Graham.

Soon after Arteta's appointment was announced, 48-year-old Emery told the BBC Arsenal had made the right choice in appointing the rookie.

"He really is prepared to make that next jump," Emery said.

"I do believe this is a good decision and I would also like it to be a good decision."

Arteta, who has never managed a club before, was named by British media as one of the candidates in the running to replace former Arsenal boss Arsene Wenger in 2018 before the club appointed Emery.

The 37-year-old has enjoyed great success at City, assisting Pep Guardiola as he guided the club to successive league titles.

Guardiola wished his former assistant success in his new job.

"I'm pretty sure he will do a great job," Guardiola said.

"He decided to move there. You cannot stop it, (you must) follow your dreams and Arsenal was a big part of his career."

Arsenal's head of football Raul Sanllehi said the club had interviewed other names before opting to pursue Arteta.

"We met several top-class candidates and Mikel stood out to every single one of us as the perfect person for us," he said.

"We look forward to him getting down to work and bringing the best out of our squad as we work to get our season back on track."

After Arsenal's 3-0 league defeat to Manchester City on Sunday, interim boss Freddie Ljungberg urged the club to make a quick decision on their next permanent manager.

Arsenal director Josh Kroenke, son of the club's majority owner Stan Kroenke, and Sanllehi both thanked Ljungberg for his three-week stewardship.

Australian Associated Press