In 1996 CSKA-Borysfen split into two different clubs: CSKA Kyiv and Borysfen Boryspil. The management of CSKA-Borysfen decided to recreate a club in Boryspil, while CSKA was reorganized by the Ministry of Defense as the first team of CSKA. Simultaneously, the actual CSKA that was competing at the lower division won a promotion and was later reorganized as the second team, CSKA-2. Borysfen after competing at the amateur level of the Kyiv Oblast applied to enter the professional competitions and gained entry to the lower divisions of the championship.
After the 2000 financial crisis at CSKA, the club, as a state company of the Sports Committee of Ministry of Defense, had its budget cut and was on the brink of being dissolved. The Kyiv city government on the initiative of Oleksandr Omelchenko bought the club in 2001 reorganizing it under the name of 'Arsenal', grandfathering everything from CSKA Kyiv. The First League second team CSKA-2 Kyiv continued to be affiliated with the Ministry of Defense and once again became the primary team of the Army football club, FC CSKA Kyiv.
While under the city government's ownership, Arsenal struggled financially, resorting to loaning many of its first team's squad players. The city had decreased funding to the club significantly as it sought to reduce its numerous sports holdings. In May 2007, it was announced that the club would be demoted due to financial issues, however soon afterwards it was revealed that Arsenal would be purchased by Ukrainian oligarch, Vadim Rabinovich. The new owner started actively financing the club and its transfers. In January 2009 the Mayor of KievLeonid Chernovetskyi bought Arsenal Kyiv for 1 hryvnia from Rabynovich; Chernovetskiy's 30-year-old son Stepan became the club's president. The following year Rabynovich bought the club back due to the poor management.
In January 2013 the owner Rabynovych stated that the club could be liquidated. During the next month it was announced that Ukrainian oligarch Oleksandr Onyschenko was ready to finance the club and claimed that he had paid all the debts. He also accused the previous leadership of the club of not passing the documents for signing the agreements on the transfer of corporate rights to the club. On 29 August, Rabynovych stated that he had resigned from the post of club president. The next day Onyschenko stated that due to the (then) present situation he could decide not to help the club. On 24 October Onyschenko stated that he had stopped financing Arsenal. The next day Arsenal failed to appear for a 2013–14 Ukrainian Premier League match against SC Tavriya Simferopol. On 28 October 2013 it again failed to appear for a 2013–14 Ukrainian Cup match against FC Nyva Ternopil. The next day general director Viktor Holovko announced that the club was filing for bankruptcy and withdrawing from competitions as it was unable to find any sponsors.
On 15 November 2013 FC Shakhtar Donetsk Chairman Rinat Akhmetov announced that after financial help from the other teams in the league; the Arsenal squad would be able to complete its 2013–14 (Ukrainian Premier League) season. But the next day Dnipro Dnipropetrovsk refused to (re)play the (16th round) match Arsenal had earlier failed to appear for (due to its bankruptcy).