The Frenchman said he is now "more optimistic" of securing the attacker's services, while he insisted that the 23-year-old has not made playing up front a condition of signingArsene Wenger has confirmed that Theo Walcott is moving closer to signing a new Arsenal deal after talks progressed "smoothly but slowly".
Goal.com revealed earlier this week that Walcott has agreed terms on a new four-and-half-year £90,000-a-week deal that will tie him to the club until 2017 and Wenger expects the England forward to put pen to paper imminently.
The Gunners forward has always expressed his desire to stay at the Emirates but with his current deal expiring at the end of the season he has been fiercely linked with a move away.
However it now seems that the former Southampton man will eventually extend his stay in north London, with the club's manager insisting he expects to keep hold of the player after tiresome negotiations.
"We're on a good road with Theo's negotiations," the 63-year-old told reporters. "I'm more optimistic this week than last week. The discussions have progressed smoothly but slowly.
"As long as nothing is signed, you are cautious. I'm optimistic we'll get to a happy conclusion."
Reports have suggested that the England international was after a clause in his contract guaranteeing him more chances to play as the central striker, after being used mainly as a winger during his time with Arsenal, but Wenger has denied those claims.
The Frenchman has instead indicated that the attacker is "happy to play on the wing", but did hint that the 23-year-old will be handed more opportunities in his preferred position.
"I can see Theo Walcott playing more up front but he never made it a condition to sign or not," he added.
"He just wants to play. He is happy to play on the flank as well. I see him playing more up front"