Arsenal manager Unai Emery worked with the 25-year-old Spaniard, who has made few appearances for Barcelona this season, during a previous loan spell at Sevilla.
Barcelona said they had also extended Suarez’s contract by one year and until June 30, 2021.
Arsenal are fifth in the Premier League,behind Chelsea, having defeated Huddersfield on Saturday and two clear of Manchester United in a tight battle for a Champions League slot.
Suarez has some prior experience of English football as he spent two seasons at Manchester City as a teenager, although his competitive appearances were fleeting.
Meanwhile, Mesut Ozil reportedly turned down a loan move to Paris Saint-Germain.
The Arsenal playmaker has fallen out of favour with boss Unai Emery – although he was named captain against Caridff on Tuesday. And according to reports in Germany, Ozil was targetted by PSG as a replacement for the injured Neymar.
The Brazil forward will be out for 10 weeks and miss both legs of his club’s Champions League last-16 clash with Manchester United .
Inter Milan have also been linked with a move for Ozil as a loan exchange for Ivan Perisic but the Croatian will remain with the Serie A club.