The central midfielder has struggled for first team football at the Emirates, and looks certain to have no long term future, with a host of talented players ahead of him in the pecking order.
The 22-year-old was sent to Germany in order to gain first team experience, and perhaps earn a permanent move at the end of the season.
But the Frenchman has struggled to find any sort of form during his loan spell, starting just nine Bundesliga matches, being substituted in five, scoring no goals and picking up one red card.
Coquelin spent a spell at Freiburg last season as well, but the German club are not willing to make his move permanent.
That means he is set to return to the Emirates in the summer, with the Gunners forced to find a buyer for a player who has struggled for first team action and form over the past two seasons.