During geotechnical constructions, at-side unloading such as excavation leads to stress redistribution in the adjacent soil and the development of soil arching effect in a lateral direction. To date, theoretical models of the lateral soil arching effect are scarce that consider the flexible retaining wall under an inner convex deformation mode. In this study, a theoretical model of the lateral soil arching effect in sand is proposed in the case of a flexible retaining wall exhibiting inner convex deformation. Three zones are defined behind the flexible retaining wall: the end-bearing arching zone (major principal stress zone); the loosened zone (minor principal stress zone); and the wedge zone. The equations for the stress redistribution in the three zones are deduced. The results indicate that using the present theoretical model, the vertical and lateral earth pressure behind the flexible retaining wall can be accurately determined. Furthermore, the present model is validated by the previous testing data, with an ‘R’ shaped distribution of the lateral earth pressure along the depth, in an accurate manner. Finally, a parametric study is conducted for the present theoretical model, offering a technical reference for the development of the lateral soil arching effect.