Karim Benzema has shaken hands on a new contract with Olympique Lyon.

"We shook hands 48 hours ago," the club president, Jean-Michel Aulas, told reporters yesterday. "We have an agreement with Karim. Now we have to reach one with the people who advise him."

Manchester United boss Sir Alex Ferguson has admitted interest in Benzema.

The 20 year-old, who has scored 26 goals in all competitions this season, already had a contract with Lyon until 2012 and Aulas was negotiating a two-year extension with a pay rise that would make him the highest-paid player in the French league.