The 22-year-old has been linked with a move to the Gunners for some time.
Matuidi’s contract with the French side expires in 2013.
“Today I am happy to be at St Etienne,” he told Le Quotidien du Foot. “I didn’t want to leave ASSE for the sake of it in the summer.
“St Etienne remains a great club. Moreover it is a real honour to wear the armband.
“Arsenal? Of course I won’t hide it is a challenge that attracted me. Arsenal is a very big club. But today I am at St Etienne and the aim is to achieve a great season here.
“We will see what will happen in the future, we will think about Arsenal again at the right time. I will probably prolong.
“I have to meet the chairman soon to talk about the future, but I am not alone to make such a decision.”
