Fernandes, 31, is currently on his summer break following United's involvement at the World Cup and is due back for pre-season training next week. Talks between his representatives and the club over an improved contract have been ongoing, and while no formal agreement has yet been reached, it is understood the midfielder has now decided his long-term future lies at Old Trafford.
The decision brings to an end 12 months of uncertainty over his position. Last summer, Fernandes weighed up a lucrative move to the Saudi Pro League before opting to stay for one more season to assess whether Manchester United could match his ambitions.
The appointment of Michael Carrick as manager appears to have played a significant role in swaying him, with United securing a return to the Champions League under the new manager and continuing to strengthen the squad as they build towards a title challenge, reports the Mirror.
Fernandes has entered the final year of his current deal, though it carries the option of a further 12-month extension. Carrick is understood to be keen to have that situation resolved as he plans his assault on the Premier League next season, and with the player himself aware this is likely to be the last major contract of his career, he is set to become United's highest earner on a deal worth around £400,000-a-week.
Retaining Fernandes would represent a significant boost for United given his influence since arriving from Sporting Lisbon in a £47m deal back in 2020, a signing that has proven to be one of the most significant in the club's recent history. He was named the club's Player of the Season last term, having broken United's all-time Premier League assist record in a single campaign, and has captained the side since 2024.
United's willingness to meet Fernandes' financial demands reflects both his standing within the squad and the club's improved fortunes under Carrick, who took over midway through last season and guided United back into the Champions League.
The captain's new terms would make him the club's highest earner, surpassing the wage previously commanded by Casemiro, whose departure this summer has freed up room in the wage structure.
A formal announcement is expected in the coming weeks once the finer details of the extension, including the length of the new deal, are finalised between the two parties.