Despite his tender age of 21, Afobe has already made 79 senior appearances for the likes of Huddersfield Town, Reading and Bolton Wanderers. The England youth international has also tallied 13 goals so far in his career.
Afobe, who will make his debut against Leicester City tonight, will wear the number 23 shirt.
Speaking to MK Dons Player, the Gunners forward said: "I'm really pleased. As soon as I spoke to the manager I knew this is what I wanted to do. It was an easy decision for me.
"I'm a striker who will hopefully score a few goals, I've got good pace and I link to link-up with the midfielders and wingers.
"I'm just really looking forward to getting going now. I just want to play games and help this team out as much as I can."
Afobe joined Arsenal’s Academy at the age of six and his impressive performances for the Gunners' youth sides earned him a first professional contract in February 2010.
Later that year, he joined Huddersfield on loan, making his senior debut in a 2-0 win over Sheffield Wednesday. Afobe, who scored his first goals in professional football in the Terriers’ 5-2 triumph over Rotherham United, finished the season having netted eight times in 32 appearances.
Afobe made his first-team debut for Arsenal in an Emirates Cup clash against American side New York Red Bulls in the summer of 2011. Later that season, Afobe spent time on loan with Championship outfit Reading.
In August 2012, the Kent-born forward joined Bolton on loan and he introduced himself in style by scoring a hat-trick in a friendly with Tranmere Rovers. Afobe scored three times for the Trotters before joining Millwall for the remainder of 2012/13, where he would make five appearances.
Afobe spent the majority of last season on loan at Sheffield Wednesday, scoring two goals in 13 games for the Owls as they avoided relegation from the Championship.
On a international level, the powerful youngster has represented England since the age of 11, having captained an Under-12s side at the 2005 Junior World Cup in France. Afobe also scored four goals in three games for the Under-16s in Victory Shield, which equalled Michael Owen’s record at that level.
Afobe was also part of the England Under-17 squad that won the European Championships in May 2010 and he has since gone on to represent the Under-19s and, more recently, the Under-21s.