The Gunners have accepted a £2m bid from the Clarets for the 22-year-old who is now set to discuss personal terms.
A report from Goal in May revealed that Arsenal were looking to sell Ballard this summer due to the fact that he is not believed to be part of manager Mikel Arteta’s plans for the future.
Although Millwall were believed to be keen on securing a deal, Burnley are now leading the race to sign the defender after reaching a breakthrough in negotiations with the Premier League outfit.
The Clarets are in the market for a new central-defender as they will no longer be able to call upon the services of Ben Mee and James Tarkowski next season.
Mee meanwhile will be on the lookout for a new club this summer as he is also set to leave Turf Moor at the end of June.
Burnley manager Vincent Kompany will be looking to make the perfect start to his spell in charge of the Championship side when they face Huddersfield Town on July 29th.
Quiz: Can you name which club these 27 ex-Burnley players are playing for now?
Providing that Burnley are able to agree personal terms with Ballard, this could turn out to be a very clever bit of business by the club.
During the previous campaign, Ballard produced a host of assured performances in his loan spell at Millwall.
As well as making 1.9 tackles and 1.7 interceptions per game for the Lions in the second-tier, Ballard also won 3.9 aerial duels per fixture as he averaged a respectable WhoScored match rating of 6.93 at this level.
Having made 30 Championship appearances in the previous term, Ballard will unquestionably fancy his chances of hitting the ground running at Burnley later this year.