Sanogo, 20, is currently playing in the U20 World Cup in Turkey and has caught the eye in the tournament, scoring in two matches out of three to help France reach the knock-out stages.
Sanogo was available as a free agent, having left Auxerre following the expiration of his contract, after making 24 appearances and scoring 11 goals for the French side, who he joined as a 14-year-old.
Arsenal boss Arsene Wenger said: "Sanogo is a good young signing for us. He has shown that he has potential with his recent performances for Auxerre, and also for the France U20 side.
"We are looking forward to Yaya joining us and continuing his promising development."
The Arsenal website said: "The deal is subject to the completion of formal registration processes, with Sanogo joining up with his new team-mates after his participation in the U20 World Cup.
"Everyone at Arsenal looks forward to welcoming Yaya to the club."