The north London announced on Monday that the "first-team squad, head coach Mikel Arteta and core coaching staff" had agreed a 12.5% wage reduction for 12 months starting before the end of April.
Salaries would be repaid in full if the club qualifies for next season's Champions League or part-refunded should they only secure a place in the Europa League.
However, at least three players have rejected the proposal including Ozil, who is the club's highest-paid player on £350,000-a-week.
Sources close to negotiations have told ESPN that Ozil turned the club down because of a lack of effective communication over how the money would be used and the future financial implications, rather than for personal financial reasons.
Ozil gives away at least £2 million every year in charitable donations including paying for more than 1,000 vital operations for children across the world and funding a new training facility for young players in his parents' hometown in the Zonguldak area of Turkey.
Talks remain ongoing with Ozil believed to be willing to take a higher pay cut than the 12.5% agreed elsewhere. However he believes the process has been rushed, with insufficient consultation involving lawyers or contract experts.
Sources have told ESPN a verbal agreement has been reached but the paperwork is not completely finalised.
Defender Hector Bellerin has led the discussions on behalf of the players as the club's Professional Footballers' Association representative and is understood to have been torn over how best to handle the situation, balancing individual player concerns with the club's financial pressures and perception within wider society.
Sources have told ESPN that several younger players in the squad felt pressurised to accept a wage cut rather than a deferral, which was agreed by other Premier League clubs including Southampton and West Ham.
There was also some surprise that Arsenal were asking for a cut lasting 12 months as opposed to a three-month deferral with a review once the coronavirus pandemic subsides.
The squad voted twice on the proposal with around 15 players deciding against supporting the idea before Arteta intervened on behalf of the squad.
Sources have told ESPN that, while Arteta insisted no player voting against the proposal would be thought of negatively, he underlined the wholesome values Arsenal represent as a club and highlighted the powerful message it would send in becoming the first English team to agree a pay cut as opposed to a deferral.