Ceballos made just 13 La Liga appearances for Real last season, but is seen as one for the future after signing from Real Betis in 2017.
The pair join Gabriel Martinelli in signing for the Europa League finalists this summer, the 18-year-old striker having joined from Ituano earlier in July.
A loan move to Arsenal not only provides Dani Ceballos a chance to prove himself in the biggest league in the world but also helps him grow as a player in order to compete with Real Madrid's superstar midfielders in the coming years. I knew I had the confidence of the coach, which was very important.
French defender William Saliba has joined Arsenal from Saint-Etienne, but will return to the Ligue 1 side for the 2019-20 season.
"I told him I was thinking of joining and he told me not to think twice because this is a great city and a great club and that I was going to have a great time".
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This is the second deal announced in a matter of hours, with Real Madrid midfielder Dani Ceballos joining Arsenal on loan for the season. "So that really helped me to make my mind up".
"I read and am sent articles about players we're supposed to have missed out on and they're players we've never even talked about".
The Gunners have landed the young Spaniard on a season-long loan from Real Madrid, with Zinedine Zidane deeming him surplus to requirements at the Bernabeu.
The Gunners have been financially struggling this summer, so the loan market was always high on Unai Emery's agenda, and Ceballos had always been in his list for months. "He is a talented player with big technical ability, creativity and precision", he said.
Ceballos also singled out Bellerin as another major factor in his decision, adding: "I get on really well with Hector away from football, on a personal level". With Spain, he enjoyed an fantastic European Under-21 Championships, prompting him to be named in the Team of the Tournament the second time around.