Nwaneri's breakthrough season comes as a result of injuries to the Gunners' main attackers this season.
The impressive England Under-21 star's contract is valid until the conclusion of the upcoming season.
Both manager Mikel Arteta and new sporting director Andrea Berta are eager to secure the long-term futures of Arsenal's most promising young players.
Nwaneri set for new deal
BBC have reported that Arsenal have begun talks with the representatives of the 18-year-old player regarding a contract extension.
Nwaneri is likely at the top of the list of young players that Arsenal would like to sign to a professional contract; however, it is understood that no official contract offer has been made to Nwaneri yet.
The academy product will likely agree to a long-term deal and receive a substantial salary increase without issue.
It is anticipated that formal negotiations with the Londoners' representatives will commence in the coming weeks.
Nwaneri has played 21 Premier League games in 2024-25, scoring three goals and providing two assists. In total, he has made 31 appearances for Arsenal in all competitions this season.