The 49ers and quarterback Colin Kaepernick are reportedly working on a restructured contract designed to alleviate concerns for both sides.

The NFL Network reported on Friday the 49ers and Kaepernick are “closing in” on a contract. The deal could eliminate the huge financial concerns for the 49ers in the event Kaepernick sustains a severe injury. It would also give him the freedom to leave the 49ers after this season.

A source told CSNBayArea.com that there is work to be done before the sides agree on a deal that would erase the injury guarantee from Kaepernick's contract and potentially make him a free agent in the spring.

Under terms of the original contract, the 49ers would be liable for Kaepernick’s entire $14.5 million base salary for 2017 if he sustains an injury and is unable to pass a physical on April 1, 2017.

In return, the 49ers would be expected to void the final four years of Kaepernick’s contract, making him an unrestricted free agent and eligible to sign with any team upon the opening of the new league year in March 2017.

Kaepernick signed his six-year, $115 million extension in June 2014, following his first full season as the team’s starter.

Coach Chip Kelly on Thursday and Friday said general manager Trent Baalke has no influence into coaching staff’s decisions on how players are used. Kelly said Kaepernick’s contract status has not been a reason he has remained as the team's backup quarterback.

“I played him in the first game,” Kelly said of Kaepernick. “Right? So that answers that question.”

Kaepernick has suited up as the 49ers’ No. 2 quarterback behind Blaine Gabbert for each of the 49ers’ first five games. Kaepernick played three snaps in the season-opening game against the Los Angeles Rams. He did not attempt a pass.

Kaepernick and his representation requested permission to seek a trade from the 49ers in the offseason. The 49ers granted permission. The 49ers and the Denver Broncos appeared to have a deal in place, contingent on Kaepernick and the Broncos working out a new contract.

The Broncos offered Kaepernick a deal for 2016 that was worth $7 million in base salary, according to sources. But Kaepernick, who was already guaranteed $11.9 million from the 49ers, due to an injury guarantee, did not accept the pay cut. The 49ers declined to make up the difference.

Kaepernick could be in the mix to return as the team's starting lineup despite Kelly saying that Gabbert has outperformed him in practices.

Kelly said he has not yet held discussions with the coaching staff about the team’s plan at quarterback for the 49ers’ next game, Sunday, Oct. 16, against the Buffalo Bills. The players are off until Tuesday after a poor showing in the 49ers’ 33-21 loss to the Arizona Cardinals on Thursday night.

Gabbert ranks among the bottom in nearly every statistical category. The 49ers average a league-worst 170 yards passing per game. Gabbert has completed 58 percent of his pass attempts with five touchdowns and six interceptions and a lowly 69.9 passer rating.

Kelly has cited Kaepernick's loss of weight and strength as reasons he has not been the same player he was in 2013. Kaepernick underwent surgeries on his shoulder, knee and thumb and lost considerable weight in the offseason. Kelly estimated that Kaepernick is approximately 10 pounds under his target weight of 225 pounds.