Arsenal boss Arsene Wenger will sign his new deal in the New Year.
The Sunday Mirror says the offer has been on the table for more than a month.
Wenger, who joined Arsenal from Nagoya Grampus Eight in 1996, has not signed it yet as he has been concentrating on Arsenal's Premier League campaign.
He is now faced with a hectic Christmas and New Year programme and once that is out of the way, he will formally commit himself to the club.
"He knows we want him to stay and we believe he wants to stay," said a senior club source. We are confident it will be all be signed and sealed by the end of next month."
