Arsenal news, exclusives and analysis
The 18-year-old right-back, who can also operate as a central defender, will enter the final six months of his current deal in January.
Walters is still waiting to make his debut for the Gunners but has been named on the bench 13 times – including in Arsenal’s last two games against Luton Town and Aston Villa – and is hoping to first appearance against PSV on Tuesday.
He has attracted interest from teams in England’s top-flight and across Europe with Arsenal now facing a battle to keep him, according to the Evening Standard.
Walters joined Arsenal’s academy three years ago from north London rivals Tottenham.
The England U19 international is thought to be happy at Arsenal but interested clubs will hope to tempt him into a move with more regular playing time as an incentive.
Arsenal, though, want to keep hold of Walters, especially given a number of their defensive stars are currently injured.
Jurrien Timber is still ruled out with an ACL injury but recently stepped up his recovery and teased fans on social media about his possible return.
Midfielder Thomas Partey – who can play at right-back – is also currently absent for Arsenal.