The Gunners and Villa made offers of around £30million this week and the Canaries are deciding what is best.
But PA has been told Villa have put together an impressive offer for Buendia and they are now favourites to sign him.
Any deal will surpass the record £28million which bought Ollie Watkins from Brentford last summer.
Arsenal do at least remain in the hunt and are long-time admirers, having made their interest clear during last summer’s restart following the enforced coronavirus break.
But Villa have extensively scouted the 24-year-old and watched several of his final games this season.
“One dreams of playing for titles, it is an ambition that I have, it is a pride that important clubs are interested in you, it means that you are doing things well and it is a motivation to continue working and one day achieve it.”