The 23-year-old, who did not play in Arsenal’s last nine matches of the season being an unused substitute twice, is going back to Brazil although Wenger did not say what club he would be joining.
He made 16 Premier League appearances last season, starting just six times, after having been a regular in 2008-09 and playing roughly half the games in the campaign that followed.
“Denilson is likely to leave to go to Brazil on loan,” Wenger was quoted as saying on the club’s website (www.arsenal.com).
The Brazil Under-19 captain joined Arsenal in 2006 from Sao Paulo and, to date, has played 153 games scoring 10 goals.
Meanwhile Arsenal completed the signing of Ivory Coast international striker Gervinho on Monday on a long-term contract for an undisclosed fee from French champions Lille.
Wenger said: “Gervinho is a player that can play in a number of positions up front. He can play on the right, on the left and through the middle.
“He has qualities that I find very important, like his movement off the ball. He has the qualities we like technically. He is good one against one, he is strong and was the best provider in the French league with assists and he scored 15 goals. I think he is a very good addition to the squad.”
Gervinho added: “It’s a great feeling to be an Arsenal player. I’m very happy. I’ve always dreamed to play for this club. I’ve achieved this dream now and I am so happy. It’s one of the most beautiful days of my life.”