The Austrian leaves the Hammers just six months after signing a new five-year contract, having told the club he wanted to go earlier this week.
Arnautovic passed his medical on Friday, and now talkSPORT understands the 30-year-old has agreed personal terms with Shanghai to finalise the transfer.
West Ham ran out of patience with Arnautovic after he asked to leave for the second time, and it is understood the club accepted the low offer in order the shift the forward as quickly as possible.
The £23million fee is significantly less than the club were offered in January, when they rejected £35million from an unnamed Chinese club.
During the messy transfer saga, the forward’s brother Danijel, who is also his agent, criticised West Ham for their treatment of the wantaway star.
Click Here: fjallraven kanken backpack