Pepe is expected to undergo his medical with the Ligue 1 side on Thursday.
Newsonline report that it was confirmed by transfer expert, Fabrizio Romano, in a series of tweets today.
“Nicolas Pépé has reduced his salary in order to make Nice move possible.
“French club will cover main part of his wages, green light arrived and documents ready with Arsenal.
“Medical tests will take place in the next 24hrs, on Thursday,” Romano tweeted.
Pepe has snubbed interest from Leicester City, who were ready to cover his full wages if he chose to remain in the Premier League.