Arsenal are ready to offer defender David Luiz a new contract on reduced terms, according to a report.

The Brazil international joined the Gunners on a one-year deal from rivals Chelsea last summer and has yet to discuss fresh terms with the club.

However, The Mirror claims that Arsenal are planning talks with Luiz over an incentives-based deal, which will see his salary adapt depending on appearances and other various bonuses.

Speaking on Monday, Luiz's agent Kia Joorabchian revealed that there is a strong chance his client will remain at the Emirates Stadium for at least another 12 months.

"He's very happy at Arsenal. He has an extremely good relationship with both the coach and the sporting director," Joorabchian told Sky Sports News. "He has good relationships all throughout the club, right up to the owner. He respects everybody.

"Arsenal had an option, which expired. We also had a pandemic. So the option expired in the middle of the pandemic.

"David will sit down with Arsenal before the season begins, have his conversations and they will both decide if he will stay or not.

"That will come before the season starts. The chances are very high [of Luiz being at Arsenal next season]. There is no desire to leave."

Luiz has made 32 appearances for Arsenal in all competitions this season, with 25 of those coming in the Premier League.