Arsenal manager Unai Emery will have a transfer budget of only £45million to spend this summer.

Having been told he could just make loan signings during the January transfer window, Sportsmail understands the Gunners boss will again be forced to work within stringent financial boundaries in the summer.

Emery has been informed he will have cash to spend ahead of next season — and Sunday's 3-1 loss at Manchester City underlined the gulf between Arsenal and the elite.

Arsenal boss Unai Emery will have a transfer budget of only £45m to spend this summer

Emery is keen to sign at least three players including a new left back this summer, but in today's market, a £45m kitty will create obvious difficulties trying to improve the squad.

Selling players would enable Emery to supplement his transfer budget. Offloading Mesut Ozil would certainly loosen the restrictions. The German's £350,000-a-week wages are proving a crippling burden on the club's finances, particularly given that he is now on the periphery of Emery's team.

Yet moving on Ozil is likely to prove easier said than done, precisely because of those astronomical wages.

Aaron Ramsey and Danny Welbeck are set to leave on free transfers and, along with Petr Cech's retirement, that will slash close to £300,000 off the weekly wage bill.

Pierre-Emerick Aubameyang looks dejected following his side's defeat to Manchester City

The club will also look to sell a number of fringe players to help generate extra transfer funds, while qualifying for the Champions League would also help boost the kitty.

Meanwhile, the Gunners hope to have appointed a new technical director by the start of next season, with Roma supremo Monchi emerging as a leading contender for the role.

Monchi, who has built a reputation as one of football's outstanding administrators, worked successfully with Emery at Sevilla.

There is a growing feeling within the Arsenal hierarchy that the Spaniard is the perfect candidate to fill the newly created role.

Selling players such as Mesut Ozil would enable Emery to supplement his transfer budget

Former Holland winger Marc Overmars, who won the Double with Arsenal in 1998, is also in the running for the position, but there are concerns over the Dutchman's suitability, given his lack of top-level experience as a technical director.

Overmars has spent six years as Ajax's director of football, but the Dutch league is not viewed as one of Europe's elite competitions.

Ex-Arsenal midfielder Steve Morrow, who remains involved in the club's footballing set-up, could also feature in the internal shake-up at the end of the season.