The three year contract, which begins in May 2009 will see Character World design and produce duvet covers, curtains, cushions, fleece blankets and pyjama cases.
The Arsenal range will be available in 2009 from club shops and selected retailers which are yet to be announced.
Matthew Gilmore, retail and licensing manager at Arsenal said: “Character World was an obvious choice as a leading player in the licensed textile sector. We were impressed by the company’s innovative designs and are pleased with the finished Arsenal products.”
Danny Schweiger, director at Character World said: “This is an exciting license for Character World as it’s a major stride into the football market. Arsenal is one of the most popular football clubs in Britain and has a large and loyal fan base.
“We’re confident our designs will appeal to fans old and young and we’ll be developing innovative new products for the range.”