The Spaniard's new deal will keep him at the Emirates Stadium until 2019, which will come as a huge boost to the Gunners because of his consistency this season, being a regular starter and keeping Kieran Gibbs out of the team when it was vice versa a few seasons ago.
He has been handed a £20,000-a-week pay rise as part of the new agreement, which will lift him into the £80,000-a-week bracket.
“We’ll announce that at some stage, when it’s finished,” said Wenger.
“It’s not over the line completely but we’re not far.”
Initially viewed as too slow, Monreal has quickly made the grade in England's top flight but has proved his doubters wrong and has proved an integral part of Arsenal's impressive defence this season, helping them to the top of the Premier League.
"Everything feels right here.
"I can say that I feel at home on and off the pitch. If you don't feel good off the pitch and in life in general, obviously you can't give 100 per cent.
"However, at the moment, I love England, I love London and I love my team-mates so everything is positive."
Monreal signed for the Gunners from Malaga for £8.5m in 2013 on what was understood to be a four-year deal running until 2017.