Arsenal's tortuous negotiations with Theo Walcott over a new contract finally appear to be edging towards a favourable conclusion with the Premier League club expected to make an improved offer that will effectively be worth £25m in a bid to retain the England forward's services.

The 23-year-old, whose current deal expires at the end of the season, would be paid about £90,000-a-week with a significant signing-on bonus, thought to be worth around £3m, written into the agreement should he agree to extend his stay at the Emirates stadium for a further five years.

Arsenal will reopen talks with Walcott's representatives in the next 24 hours and, while the deal is unlikely to be signed before the weekend, the management are confident they will be able to announce the player has committed his long-term future to the club, perhaps even next week.

Player and club have been in limbo since the forward rejected what was dressed up as a "final offer" worth £75,000 a week back in August. Walcott found himself cast to the fringes of the first-team while communications between his employer and his representatives remained fractured, dialogue having dried up, though efforts were made to build bridges with Arsène Wenger last month.

Walcott asked for reassurances over his future, clarity over his role in the team and details of the club's long-term ambition in that meeting with the manager and was duly restored to the side in his favoured central striking role for the league game at Reading, in which he scored.

His form since, including a stunning hat-trick in the 7-3 trouncing of Newcastle, has justified that switch with Wenger impressed by the mature and professional manner he had displayed during that period out of favour. The Frenchman has consistently insisted he considers Walcott key for the team's future, despite his failure to select him in his starting line-up in domestic and European matches over the first few months of the campaign, and was determined to retain the player's services despite mooted interest from Chelsea, Manchester United, Manchester City and Liverpool.

Walcott, who would have been available on a free transfer in July 2013, has scored 14 goals this season to establish himself as the club's leading scorer and is expected to be granted a further opportunity in the striking role, starting with Sunday's visit of Manchester City to north London.

An Arsenal target, the Barcelona forward David Villa, will not be moving to the Premier League after the Catalan club's president, Sandro Rosell, said the Spain international would definitely remain at Camp Nou. "I completely rule out the transfer of Villa during the winger window," he said. "He is ours and we need him."