The 25-year-old, who has made 132 appearances for the Gunners and has five England caps, spent the second half of last season with Roma and the Saints switch is the fourth loan move of his career.
Ralph Hasenhuttl's seventh summer signing reportedly penned a contract extension with Arsenal before he left, which will take him through to 2024.
Southampton manager Ralph Hasenhuttl said: "Ainsley is at a good point in his career, with a lot of experience already, but he is also still a player with potential, and he is someone who can definitely help us.
"I think he fits well with us and can develop his game even further during his time here. He can also play in different positions, which is always a good thing, and I am pleased to welcome him as part of our squad."
Saints also snapped up 19-year-old winger Samuel Edozie from Manchester City on a five-year deal.
Hasenhuttl added: "Samuel is another promising young player who brings good attacking qualities to us, and he is someone who fits very well with our philosophy.
"He is a quick player who has impressive technical ability, so he will be able to help our squad immediately, but we also see a lot of potential in him for the future.
"This is a good opportunity for him, and I know he is excited about the chance to come here and improve."
Meanwhile, Southampton goalkeeper Mateusz Lis has joined French side ES Troyes AC on a season-long loan deal, while Jack Stephens has completed a loan move to AFC Bournemouth.