"The signing of the contract will take place in the next few days," the club said in a statement posted on its website.

The 40-year-old, who spent most of his playing career at Barcelona, coached Barcelona's B team before taking control of the first-team squad in June 2008 from Dutchman Frank Rijkaard.

The former Spanish international playmaker won seven trophies in his first two seasons at the Camp Nou.

He had a remarkable debut season winning the Champions League, league title and Spanish Cup.

Guardiola added the World Club Cup, the Spanish Super Cup and the European Super Cup to his impressive haul the following year, as well as retaining the Spanish League with a record breaking 99 points.

Barcelona failed to retain their Champions League title in 2010 after they were beaten in the semi-final by Italian champions Inter Milan, who were coached at the time by Jose Mourinho.

Mourinho took over as coach of Barcelona's arch rivals Real Madrid just before the start of the season.

Barcelona are currently seven points clear at the top of La Liga after 22 games this season.

Guardiola's existing contract was set to expire in June 2011.

At Barcelona he has some of the best players in the Spanish league at his disposal, including Spain's Xavi Hernandez and Argentina's two-time world player of the year Lionel Messi.

Barcelona provided seven of the starting 11 players that secured Spain's first ever World Cup win as they beat Netherlands 1-0 in South Africa last year.