Sunderland are to begin talks with promising forward Duncan Watmore over a new contract, report The Mail.
Watmore, 21, is regarded as one of the club's brightest prospects, but his current deal is set to expire at the end of the season.
The Mail reported last week that concerns were growing at the club about a stalemate over Watmore's future, but the latest update suggests there has been progress, if talks are now set to begin.
Sunderland would be entitled to compensation via a tribunal should Watmore leave on a Bosman at the end of the season, but the club are keen not to let that scenario play out.
Watmore has an impressive record this season of seven goals in seven matches.
These include one goal in three Premier League games - which encompass just 40 minutes of football combined, with the strike coming early in the season against Norwich City.
He has one goal in his solitary Capital One Cup appearance this season, netted against Exeter City - and has an impressive record of five goals in three games at under-21 level, which included a hat-trick against Manchester City.