Jack Wilshere, Aaron Ramsey, Alex Oxlade-Chamberlain, Kieran Gibbs and Carl Jenkinson are all on the brink of agreeing deals that would keep them at the club until at least 2017, with an announcement possible in the next 48 hours.
Arsenal manager Arsene Wenger is determined to avoid a repeat of the exodus of key players over the past 18 months and has made a conscious effort to focus on young British players in the hope that they will collectively show loyalty to his vision.
Talks have progressed positively in recent weeks with Wilshere, Ramsey, Oxlade-Chamberlain, Gibbs and Jenkinson, to the point where all five players are now ready to commit to various four- and five-year contracts.
Walcott, though, had been in a stand-off with Arsenal since August, after he refused the offer of a five-year deal worth £75,000 a week. Fears were mounting he would simply see out his existing contract and then leave at the end of the season, but in a significant step forward, fresh negotiations were held last week and have continued in recent days.
Although no agreement has been reached, there is more optimism about a potential deal than at any stage in the last four months. It was hugely significant that Walcott was given his chance as a main central striker in the 5-2 win against Reading on Monday and, after impressing in his first Arsenal start there, would like more chances to shine there.
Walcott was upset by his treatment earlier in the season, when it appeared that he had been dropped for certain matches due to non-footballing reasons, and he will seek reassurances about Wenger's view of his place in the squad.
The Walcott camp had also felt that the original £75,000-a-week offer did not reflect adequately his status as an England regular, particularly as he is also one of the club's most marketable and popular players.