According to the Turkish newspaper Milliyet the Gunners were holding out for €5 million while Galatasaray’s initial offer was for €2 million.
The Germany international is expected to complete his move to Galatasaray over the coming days.
The Istanbul giants have been linked with Podolski for the past four seasons and made an offer for the 30-yera-old striker in January but he joined Inter on loan.
The Germany international had an unsuccessful spell with the Serie A giants scoring just one league goal. The experienced striker is currently on holiday in Turkey.
Podolski won the World Cup with Germany last season and wants regular first team football to keep his place in the national team side.