Since breaking into Saints' first team at the start of the 2005/06 campaign, the English youngster made a big impression, scoring five goals in all competitions for the Championship club.
"Theo Walcott is a very young player but has already shown in his performances for Southampton that he is a talented player with huge potential," Arsenal manager Arsene Wenger said.
"I also like the fact that he is a versatile player who is incredibly dedicated, shows great determination to succeed and is blessed with electric pace. We are delighted Theo has signed for the club and will make a fantastic addition to our squad."
Walcott made his Barclays Premier League debut at the start of the 2006/07 season and has remained as a first-team regular for the Gunners ever since.
He has amassed 224 top-flight appearances, scoring 53 goals, to help Arsenal finish in the top four in each one of his BPL seasons, as well as winning consecutive FA Cup finals in 2014 and 2015.