The Blues have reportedly agreed in a fee in the region of £20 million for the 28-year-old and according to the Liverpool Echo, Walcott will undergo a medical with the club on Tuesday afternoon.
Walcott has been of interest to Everton boss Sam Allardyce since he took over the role at beginning of December.
In his pre-match press conference prior to the Blues’ 4-0 defeat away at Tottenham Hotspur, Allardyce confirmed that the two clubs had been discussing a deal and that he was hopeful that the deal would get done.
The winger has seemingly fallen out of favour at Arsenal, relegated to substitute appearances and starting in cup games.
Everton have been favourites to sign Walcott since he was initially linked with a move to Goodison Park at the beginning of December.
The Blues reportedly made an inquiry into the availability of the 28-year-old days after Allardyce took over the vacant role at Finch Farm.
Walcott had also been linked with a move back to his former club Southampton but Everton’s willingness to match his current wage packet and the possibility of game time on Merseyside is seemed to have swung the deal in the Blues’ favour.
Ins and Outs
The Blues are expected to make another move or two in this transfer window - with the 63-year-old targeting a left-sided defender.
Davy Klaassen and Sandro Ramirez are still both reportedly set to leave Everton during this window, despite the Dutchman’s agent stating last week that he wants to fight for his place at the club.
Sandro, 22, is expected to be used as a makeweight in any possible deal for Sevilla midfielder Steven N’Zonzi.