Nelson’s current contract is due to expire at the end of next month and Arsenal have been in negotiations with the player since the turn of the year.
AC Milan and Brighton have both expressed an interest in the 23-year-old, who has scored three goals this season.
Nelson’s desire, however, has always been to stay at Arsenal after joining the club at the age of eight and coming through the academy.
Speaking to Standard Sport in November, Nelson said: “I have been here for so long and I’m very comfortable here.
“I am an Arsenal fan and, of course, I want to sign a new contract. I am just going to be ready for anything I get now and give my all for the team.”
Talks with Nelson this week have gone well and, after he rejected previous contract offers, there is now a sense that he will stay. Though he has struggled for minutes this season, he has proved a useful option for Mikel Arteta off the bench.
Nelson scored twice as a substitute during the 5-0 win over Nottingham Forest earlier this season, while he struck a 97th-minute winner against Bournemouth in March. Arteta has a good relationship with Nelson after first working with him nearly 10 years ago when he was doing his coaching badges.
When Arteta was hired by Arsenal in 2019, Nelson was one of the few youngsters he thrust into the first team but the winger’s form dipped. He spent last season on loan at Feyenoord and Arsenal’s coaching staff have been impressed by how he has responded after returning to the club.
Nelson missed last week’s defeat at Forest due to illness, but he hopes to return for Sunday’s final game of the season at home to Wolves.
Arsenal will be without Gabriel Martinelli (ankle), Oleksandr Zinchenko (calf) and William Saliba (back) for the game. It could present Nelson with the chance to earn a rare start, although Leandro Trossard is another player hoping to come into the side in the absence of Martinelli.
The Gunners are guaranteed to finish second whatever the result on Sunday, but Arteta is determined to finish the season on a high after two defeats on the spin.