The France international will remain on the same £150,000-a-week terms as his current deal and is set for talks in the New Year before putting pen to paper
The Frenchman has been in good form in recent weeks, prompting City's sporting director Txiki Begiristain and manager Manuel Pellegrini to evaluate Nasri's current deal, which has two years remaining.
The midfielder will remain on his current terms with a new contract that will tie him to the club until 2017.
Nasri is happy at the Etihad Stadium and has seen his influence grow this season under Pellegrini, bagging three goals in a week at the end of November and beginning of this month.
The Frenchman suffered a dip in form last season under Roberto Mancini as the pair shared a strained relationship during the Italian's final months in Manchester, and Nasri admitted last month that he had played poorly.
"Everything he [Mancini] was saying was difficult for me to accept," he told reporters. "It wasn’t his fault, it was just me because I wasn’t in a good place. I wasn’t feeling myself. It was a tough season. After the Euro Championships and a beef with the French journalists, for months I refused to speak to anybody and had a lot of bad press in France and I wasn’t involved in the national team.
"It was a little difficult. In my head, I wasn’t the same. I didn’t play well for City and lost my spot in the squad and, at the end of the year, you look at your season and you realise, ‘I was not myself'."
Nasri played the full 90 minutes for City as it drew 1-1 away to Southampton on Saturday.