The 19-year-old has shown promise in the youth set up at the Bundesliga side, scoring six goals and assisting six times this season in just 12 appearances.
Eisfeld was part of Dortmund’s Academy for seven years and can play anywhere across the midfield, and has also featured at youth level for the German national team.
The midfielder has admitted it’s a real honor for him to play for the Gunners and is looking forward to getting his career at the Emirates started.
He told the club’s official website: “I feel very proud to have signed for Arsenal. This is a great club, with many great players, and I’m so happy to be joining Arsenal.
"It’s a real honour to be team mates with the great players at Arsenal, and also training everyday with players like Tomas Rosicky - who I grew up watching play at Dortmund. I will give it everything I have here and do my best to make the manager, players and fans happy.
"I would also like to thank Borussia Dortmund, where I played for the last seven years, for everything they have done for me. I had a great time there, and there were many wonderful coaches who helped me get to where I am today."
Arsène Wenger was equally happy stating: “Thomas is a player we have liked for some time. We’ve watched him closely this season, where he has excelled for Dortmund’s youth team.
"He is young but has proven to us that he can play, that he has the attitude and technical ability to be a valuable addition to our squad. We’re very pleased to welcome him to the Club and look forward to his contribution in the coming seasons.”