Wenger will officially sign the deal early in January and will continue his reign as the longest serving manager in England.
The Gunners have started the season brilliantly and sit nicely on top of the pile in the Premier League, however recent results may worry supporters and boss alike.
A draw at home with Everton last week, followed by defeats away at Napoli and Manchester City have got people talking and with Chelsea up next it may be a defining week for the club.
The north London club have already lost at home to the Blues this season and will be concerned that no win in four could massively damager their momentum.
Wenger was under pressure at the start of the season but the signing of Mesut Ozil eased fans’ worries and it may take a similar deal in January to keep them on track.