Mikel Arteta need to trim his squad and it must contain a maximum of 17 non-homegrown players.
Arsenal currently have 19 non-homegrown players registered and the Evening Standard state it will be Ozil and defender Sokratis who miss out.
They failed to sell a number of players in the summer and sealed a deadline day deal for Thomas Partey.
It means Ozil could be out of action until January and it's a sad fall from grace for a man who was once a world beater.
The 32-year-old's contract is up next summer, but he is adamant he can force his way back into the first team.
Current Arsenal academy coach Per Mertesacker, who is a former teammate of Ozil's, told the Klick and Rush podcast his exile isn't due to performances on the pitch.
"He got married, has a family... perhaps his focus has changed," he begun per The Sun.
"Nevertheless, he is still happy and happy to play football.
"He's the only player I've played with for three teams - Bremen, Arsenal and also Germany.
"So I'm very sorry that he's currently in a situation where he's not really used."
While most managers will find it easy to select their teams later today, Arteta admitted it was a difficult task last month.
"I'm really happy with all the boys and the way they're training.
"But selection is getting more complicated and with this new rule of just having only 18 players in the squad makes it very difficult."
Ozil starred for Arsenal in his early days at the club after sealing a £42.5 million transfer from Real Madrid.
He recorded an incredible 19 assists in the 2015/16 season and was involved in an impressive 17 goals in the following Premier League campaign.
Former Arsenal boss Arsene Wenger believes the German's talent is being wasted.
"I feel it is a waste for him," he told the BBC. "Firstly because he's in the years where a player of his talent can produce the most.
"And it's a waste for the club as well because he's a super talent, a creative talent that in the final third can create that killer pass.
"The way football is going at the moment it's quick counter-pressing, quick transitions and everybody plays the same. It's kicked out players like Ozil. Although let's not forget who this guy is. A world champion who has played at Real Madrid.
"He's been the record player of assists, so you have to find a way to get him involved again."
Featured Image Credit: PA Images
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