Arsenal boss Arsene Wenger believes Theo Walcott will sign a new contract with the club by 31 January.
The 23-year-old striker is in the final six months of his deal and could leave on a free transfer in the summer.
But when asked if Walcott will sign before the end of the month, Wenger said: "Yes. We're on a good road."
The Frenchman added: "I am optimistic we will get to a happy conclusion. I was optimistic last week but I'm a bit more optimistic this week."
Walcott is Arsenal's top scorer this season with 14 goals in all competitions, his best tally in a single campaign since joining Arsenal in 2006.
But he rejected a new five-year deal worth £75,000 a week in August and is holding out for closer to £100,000 a week.
"The discussions progress smoothly - slowly but smoothly," said Wenger.
When asked if has complicated matters, Wenger explained: "No, it's not linked with that.
"I believe Theo can have a preference maybe to play through the middle, but first of all he never made a conditions of that to extend his contract. Certainly I would not accept it.
"Secondly, he was always happy when he plays - on the flank or through the middle? I see him playing more up front."