The England midfielder has established himself as one of the club's most important players since joining Arsenal from West Ham United in July 2023 for a reported £105 million fee.
Rice's current contract runs until the end of next season, but discussions over an extension have been ongoing for several months. BBC Sport first reported in March that negotiations had begun, and the process has now reached an advanced stage.
The 27-year-old has made more than 150 starts for Arsenal since his arrival and has become a key figure in Mikel Arteta's side. His performances have also cemented his position as an important player for England.
England manager Thomas Tuchel highlighted Rice's quality earlier this week, describing him as one of the best midfielders in Europe.
A new agreement would reportedly bring a significant increase to Rice's current salary, which is understood to be around £240,000 per week. The improved terms would put him closer to Arsenal's highest-paid players, including Bukayo Saka, who is believed to earn approximately £350,000 per week.
The proposed deal reflects Rice's growing importance to Arsenal after just three years at the club. He has played a central role in the team's pursuit of domestic and European success and has become one of the leading midfielders in the Premier League.
His consistency and versatility have made him a regular starter, with Arteta frequently relying on him in both defensive and attacking roles.
The contract developments come shortly after Arsenal confirmed that Arteta had signed a new four-year agreement with the club. The announcement on Wednesday secured the manager's future with the Premier League champions and provides further evidence of the club's intention to maintain stability around its core group.
Rice's new contract would be another major commitment from Arsenal as they continue to build a squad capable of competing for major honours.
The midfielder originally joined Arsenal after helping West Ham secure the Europa Conference League title. Since moving to north London, he has continued to develop into one of the most influential players in the team.
With negotiations now at an advanced stage, Arsenal are hopeful of securing Rice's long-term future and rewarding his contribution with improved financial terms.
An agreement would also provide a significant boost for Arteta as Arsenal prepare for another demanding period of domestic and European competition.
