Speaking ahead of a Brazil friendly against Uruguay in October, Edu said: "It will be a great pleasure to go back to the Emirates, a stadium that's home to a club I'm really fond of".
Edu joined Arsenal as a player in 2001.
Arsenal manager Unai Emery is looking to strengthen several areas of his squad this summer but with an allocated £45million transfer budget he has been restricted as to which players he can target. He will be in charge of supervising first -team coaches, academy operations and player recruitment.
After retiring in 2010, he became Corinthians director of football and has been the general coordinator of the Brazil national team, a role similar to the one he has taken with Arsenal.More news: No, Kylie Jenner Isn't the Highest-Paid Celebrity
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The Spanish outlet says Arsenal are ready to pay £18m [€20m] to sign the 25-year-old but Diaz doesn't want to commit to anything until he speaks with Zidane to see if he's in his plans for next season.
"I had the opportunity to play for many years with Arsenal and win some important titles. He understands the club and what we stand for to our millions of fans around the world", said Sanllehi.
That disappointment followed an underwhelming Premier League season where he made only five Premier League starts, with Granit Xhaka frequently favoured in the holding midfield role despite Emery's tendency to rotate his side. It is the first time the Gunners have employed someone in such a role.
Edu also won three FA Cup's win the London outfit.
Arsenal's head of football Raul Sanllehi turned to Edu after a move for famed talent-spotter Monchi fell through after the Spaniard chose to return to Sevilla.