Joachim Low is set to sign a new deal that will keep him in charge of the national side until 2010.
Low's current deal expires after next year's Euro 2008 finals in Switzerland and Austria.
But after becoming the first side to qualify for the finals, the German Football Federation are set to reward the 47-year-old with a new improved contract.
German Football Federation president Theo Zwanzinger told SID: "On the major questions we have reached an agreement with Joachim, but it has not been formalised yet. Before it becomes official we have to answer certain questions raised by him, "
Low, who acted as assistant to Jurgen Klinsmann from 2004 to 2006, took over as coach after the 2006 World Cup.
Under his stewardship the national side have won 12 or their 16 matches.
Ironically, last week Germany suffered their first defeat of the Euro 2008 qualifying campaign when they were beaten 3-0 by the Czech Republic, a performance Low described as their worst since he took charge.
SportingLife