The 24-year-old attacker’s current deal with the Liga champions runs until June 2016, but Los Blancos are ready to reward the Argentine for his good performances in the 2011-12 campaign with an improved contract.

The striker is currently on an annual salary of €3.8 million, but a pay rise to €4.5m per season awaits the Argentina international.

Higuain joined Madrid from River Plate in January 2007, and has since developed into an important first team member at the Santiago Bernabeu side. The prolific hitman has netted 91 goals in 162 league appearances for Madrid so far.

Madrid recently already tied down players such as Raul Albiol, Alvaro Arbeloa and Angel Di Maria to new deals.