The 27-year-old has been ruled out with a hip injury and Iwobi has been brought on in his place.
Arsenal released a tweet confirming the Germany international’s injury.
Ozil has enjoyed an impressive season for the Gunners this season so far.
Germany international has recorded 18 assists and with two games to go still has a chance of equalling the Premier League record of 20 set by Thierry Henry.
Manchester City v Arsenal
Kick-Off: 16:00 (GMT)
Stadium: Etihad stadium
Manchester City: Hart, Sagna, Otamendi, Mangala, Clichy, Fernando, Fernandinho, Navas, De Bruyne, Iheanacho, Aguero
Subs: Caballero, Angelino, Demichelis, Delph, Toure, Sterling, Bony
Arsenal: Cech, Bellerin, Gabriel, Koscielny, Monreal, Elneny, Ramsey, Welbeck, Iwobi, Alexis, Giroud
Subs: Ospina, Gibbs, Coquelin, Wilshere, Cazorla, Campbell, Walcott