Aouar, 19, broke through during the 2017-18 season to command a regular place in the Lyon midfield, as the team claimed third place and a Champions League group stage spot.
That talent had not gone unnoticed; Liverpool are long-term admirers of the youngster, while Barca joined his fan club this year after a brilliant campaign.
But Goal understands that Aouar has opted to stay with hometown club Lyon and will sign a new deal on July 1.
The extension will take Aouar's deal up to June 2023 and will also include a substantial salary rise for the star, who has also played for France at Under-21 level.
It is a sign of intent for Lyon, with Bruno Genesio hoping to make Aouar the centre of his young, exciting side at a time when the club faces a stiff challenge to hold on to its best players.
Nabil Fekir has also been linked with Anfield this summer, while the likes of Mariano and Memphis Depay have also played themselves into the shop window thanks to a fine 2017-18.