Wenger is ready to dip into the transfer market this summer for a new frontman, with Olivier Giroud shouldering too much responsibility at Emirates Stadium in 2013/14.
Balotelli has been billed as a top target, with the Italy international forming part of an underachieving Milan squad that will be without European football next season.
He is now expected to be snapped up by a club that can offer a UEFA Champions League stage on which to perform, and Arsenal fall into that category.
Wenger has, however, played down talk of an imminent approach for the former Manchester City forward, branding the story 'pure invention'.
The Frenchman told beIN Sport: "We cannot believe absolutely everything that is on the internet or in the papers.
"Sometimes it is created by agents or by press who need news. But in this case, it's not true."
While Arsenal are claiming to hold no interest in Balotelli, Milan have conceded that a big-money approach could see them part with the talented 23-year-old.
Vice-president Barbara Berlusconi told the club’s official website: "Balotelli is a great player.
"But the way I see it, I don't believe that someone can be irreplaceable. We will see what happens."