The Sunday Mirror says Walcott's new contract will only run for three-and-a-half years, which has caused huge frustration and concern inside Arsenal.
Walcott is close to signing a new £100,000-a-week deal that will make him Arsenal's highest-paid player and earn him a £2.5million loyalty bonus.
It means the Gunners will have to re-open contract negotiations with Walcott in just 18 months, with two years remaining on the new deal.
The club have made an internal vow to renegotiate the contracts of players they want to keep with two years remaining, after seeing Samir Nasri and Robin van Persie run down their deals to quit the Emirates.
The club were desperate to tie Walcott to a minimum four-and-a-half-year contract, but were forced to make the concession after six months of stand-offs threatened to result in him leaving for nothing.