The former United States Women's National Team star will join up with the Gunners ahead of the FA Women's Super League Spring Series, though the length of the contract is yet to be disclosed.
The first mutterings about a possible jump across the pond for O'Reilly were heard at the end of last season, when she played in a behind closed doors friendly for the Gunners.
The transfer will initially see HAO, as she is commonly known, compete with Arsenal in the Spring Series which is a short round of fixtures played from February to May and aims to bridge the gap ahead of the WSL season - which is currently in the process of transitioning from a summer to a more traditional winter league.
Stalwart for the USWNT
O'Reilly, one of the most successful players in USWNT history, retired from international duty in September of last year following a stunning 15-year career.
The University of North Carolina graduate made her first appearance for the national team at the tender age of 17, becoming one of the youngest players to debut for the USA in the past 15 years. She played her first senior match at the Algarve Cup against Sweden in 2002 whilst still in high school.
And, this was just the start of a glittering international career as she went on to feature 231 times for the side, placing her seventh all-time in US Women's National Team history, whilst also converting an impressive 47 goals for her country.
A fan favourite, known for her fierce competitiveness, O'Reilly has won her fair share of silverware. The 32-year-old finshed her tenure with the USWNT as one of just four players to become a three-time Olympic gold medallist and 2015 FIFA World Cup champion.
The right-midfielder was also successful throughout the US youth ranks, as she was part of the team that won the 2002 FIFA U-19 World Cup.
Success for club and country
O'Reilly has not only found success at international level. As a senior at UNC, the New Jersey native was part of the North Carolina team to win their 18th NCAA championship, finishing that season with a spectacular 27 successive victories.
And, this continued into her domestic career. From 2009-2011, O'Reilly played for Sky Blue FC in the Women's Professional Soccer League - where she helped the New Jersey side to the league title by scoring the championship game-winner.
Following the spell in her home state, the midfield dynamo transferred to Boston Breakers before heading to FC Kansas City in 2015. In that year, she not only won the 2015 World Cup with the USWNT but also the NWSL Championship with FCKC, who were crowned champions for the second consecutive season.
Next stop... Arsenal Ladies
Arsenal Ladies manager Pedro Martinez Losa, who won the 2016 FA Women's Cup and finished third in the WSL 1 last season, has expressed his delight at the signing of Heather O'Reilly.
Speaking to the Arsenal Ladies Website he said, "She is a world class player and one of the most respected players in the US. Her determination and character will make a big difference for this club. She will bring here a legacy of values, hard work and professionalism which will also help our young players to develop. It is a privilege for us to be able to bring her to Arsenal Ladies."
O'Reilly added: "Having come over to Arsenal last year to train, I was very impressed with the club. The facilities are world class and they have a tradition of excellence at the club that I wanted to be a part of, I'm very happy to be here."