The Sun says Gunners boss Arsene Wenger wants the Spaniard, 20, to commit until 2016 by signing a two-year extension to his current contract.
Fab, whose pay will go from £50,000 to £80,000 a week, said: "I have a contract until 2014 but I have been speaking to Arsenal and they want to renegotiate it."
The new deal will put Fab in line with the likes of star defender William Gallas, who took the captain's armband at the start of the season.