adminThe 23-year-old striker is in the final six months of his deal and could leave on a free transfer in the summer.
Walcott’s situation has been the subject of continued speculation in recent months, with negotiations between the club and player ongoing.
It is understood Arsenal are ready to make the 23-year-old one of the highest-paid players at the club with a £90 000 per week five-year contract.
Wenger said: “We are on a good road. In this situation as long as nothing is signed, you are cautious.
However, I am optimistic we will get to a happy conclusion.
“Discussions are progressing slowly, but smoothly. We still work on the transfer market, but do not want to bring in average players.”
Arsenal have been linked with a string of players including Barcelona’s David Villa.
Walcott is Arsenal’s top scorer this season with 14 goals in all competitions, his best tally in a single campaign since joining Arsenal in 2006.
But he rejected a new five-year deal worth £75 000 a week in August and is holding out for closer to £100 000 a week.
When asked if Walcott’s desire to play regularly as the central striker has complicated matters, Wenger explained: “No, it’s not linked with that.
“I believe Theo can have a preference maybe to play through the middle, but first of all he never made a conditions of that to extend his contract. Certainly I would not accept it.
“Secondly, he was always happy when he plays — on the flank or through the middle? I see him playing more up front.”
Meanwhile, Wenger has refused to rule out further departures from the Emirates, but insists players will have to come in before they do. — Sky Sports.
Online Reporter