Utility player Lucas Vazquez is also out of contract at Madrid on 30 June and there has yet to be an agreement between the club and the Spain international.
However, a report in Diario AS say that the club have improved their salary offer to the player up to €5m per season which is likely to see an agreement reached.
It is claimed that both Bayern Munich and Paris Saint-Germain were also interested in a deal but the player’s preference is now to stay in the Spanish capital.
Vazquez has transformed his fortunes at the club this season and is now a key member not just of the squad but of the starting line-up – he has started 31 games across all competition this campaign compared to just 10 last campaign.
However, an injury means he is out of action for the remainder of the season.
Vazquez had deputised both as right-back and on the right-side of a front three for Los Blancos.