Walcott’s camp reportedly met with club chiefs, including manager Arsene Wenger, contract supremo Dicky Law and chief executive Ivan Gazidis, at London Colney to agree the terms of a new deal.
Walcott is likely to be presented with a four-and-a-half year deal that runs until 2017.
Under the new agreement, the 23-year-old’s salary will climb from 74,000-euros-a-week to around 110,000-euros-a-week, which will be bolstered by top-up bonuses and a multi-million pound signing-on fee.
Walcott has indicated his desire to stay at Emirates Stadium after being verbally offered the improved package by Arsenal during fruitful discussions over the last fortnight.
He has also been encouraged that Arsene Wenger has lived up to his promise of giving him opportunities to play in his favourite centre-forward role.
Securing Walcott’s future will be a huge boost to Arsenal and manager Wenger after tying fellow Brits Jack Wilshere, Alex Oxlade-Chamberlain, Kieran Gibbs, Aaron Ramsey and Carl Jenkinson to new five-year deals shortly before Christmas.
Walcott, whose contract expires in the summer, is free to sign a pre-contract with a foreign club this month.
Barring any late hitches, that looks unlikely, with Chelsea, Manchester United and Liverpool among the leading clubs set to be disappointed that he has committed the prime years of his career to Arsenal.