Torreira struggled to make a name for himself at the Wanda Metropolitano, and the 26-year-old was expected to head back to South America last year following the death of his mother.
However, Torreira instead secured a temporary switch to Fiorentina, where he reignited his career with five goals and two assists in 31 Serie A appearances.
Fiorentina secured a spot in the Europa Conference League qualifiers thanks to Torreira's efforts, and the former Sampdoria man has been expected to sign for La Viola on a permanent deal.
Torreira's agent Pablo Bentancur has since admitted that such a move is on the verge of collapsing, though, with Fiorentina reluctant to fork out the entirety of Torreira's £12.5m option-to-buy clause.
Torreira's Emirates contract now has 12 months left to run, and the Gunners are keen to recoup a fee for the South American this summer rather than run the risk of losing him on a free transfer.
The report adds that a dispute over agent fees is the prime reason for Fiorentina's refusal to take up their option to buy the midfielder, and Lazio themselves are only after an initial loan deal.
Bentancur recently denied claims that agent commissions were holding up La Viola's move, though, telling CalcioNapoli 24: "The issue between him and the Viola is a contractual problem, it won't take much to clarify with Fiorentina and my priority is to find an agreement with them.
"For now, he is not thinking about other teams because he is very happy in Florence and is loved by the fans. The problem is only contractual, [agent] commissions have nothing to do with it."
Lazio's reported interest in Torreira comes amid widespread speculation surrounding Sergej Milinkovic-Savic's future, with the Serbia international thought to be on the radar of Manchester United.
Sarri recently claimed that Milinkovic-Savic would not remain in Serie A if he were to leave the Biancocelesti this summer, potentially paving the way for Torreira to return to Italy.
Signed by Unai Emery in 2018, Torreira quickly became a fan favourite at Arsenal after scoring his first goal for the club in a 4-2 North London derby win over Tottenham Hotspur.
The Uruguayan has since scored four goals and provided six assists in 89 appearances for the Gunners, who have handed his number 11 shirt to Gabriel Martinelli for the 2022-23 season. body check tags ::