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Arteta’s first positive test was in March 2020, where English football was forced to shut down during the pandemic.
After Aston Villa's Steven Gerrard and Patrick Vieira of Crystal Palace, Arteta is the latest Premier League manager to test positive in the recent.
"Mikel Arteta will miss our match against Manchester City on New Year's Day after testing positive for COVID-19.” read a club statement.
"Mikel is isolating in line with Government guidelines and we wish him well." the statement continues.
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Arteta’s Arsenal, which has risen to the fourth place after winning their last five matches in all competitions,Arteta is still expected to conduct today's press conference.
Quoted by the BBC, Arteta said, "This is really disappointing,".
"I took the test after feeling poorly. I will be at work as soon as I'm allowed." he added.
Club staff who had recent contact with Arteta are now self-isolating and the club has closed its London Colney training ground.
On match day come Saturday, assistants, Albert Stuivenberg and Steve Round will be in charge full time.
On Sunday due to coronavirus, the Gunners were without a number of players during their 5-0 win at Norwich. Players like Takehiro Tomiyasu, Ainsley Maitland-Niles, Calum Chambers and Cedric Soares are part of the affected players.
Arsenal's other Premier League match against Wolves on Tuesday was postponed because their opponents had a big number of Covid cases.