The Spaniard is coming to the end of his agreed one-year loan stint at the Gunners and is due to return to the Spanish capital this summer, but his future remains unclear.
However, it has appeared increasingly unlikely that he will be a part of the first-team squad at Los Blancos next season, partly due to his frosty relationship with club boss Zinedine Zidane.
Indeed, a recent report in Marca claimed that the player is unlikely to be back at Madrid next season because the Frenchman will be remaining in the dugout.
Ceballos started just four La Liga games under Zidane in their one full season (2017/18) together and the club now see him as a prime candidate for raising funds this summer, with Real Madrid transfer news being dictated by what budget the club have this year.
“After the season I have to be calm, I have to go back to Madrid and they have to make a decision, because I still have a three-year contract,” Ceballos explained, in quotes cited by Marca.
“Once I know their decision, I have to sit down with my family and we’ll see what it is the best for me next year.
“The truth is that I am happy at Arsenal. It is a club where I already have a year of experience, so it would be easy for me to return. I would not have to adapt to a new club or a new league. I think it would be a good step for me, but my future depends on Madrid and I still don’t know what his decision is.”
Ceballos told Cadena Ser last month: “Betis? They are an option. I don’t close the door to play for any club and La Liga suits me well. But I’m also happy at Arsenal and I have to have respect for them, I am focused on the remaining games.
“My goal is to play next year and it will be difficult at Real Madrid to be playing 40 games and feeling important. This year I have been happy playing and next year I want to do the same.”
The midfielder is said to want more first-team football ahead of next summer’s European Championships, with a fear that he has fallen out of contention for the Spain squad.