The 30-year-old Briton, who has been handling negotiations with team bosses himself, says talks are complete and the deal is being finalised by lawyers.
Hamilton said: "It should be done this week. There is no reason it shouldn't.
"Honestly, it's 99.6% done. There's no negotiating left, it's just legal stuff."
Source Sport has learned Hamilton, who joined Mercedes in 2013 after six years with McLaren, will earn about the same as he did under his first contract with the German team - a basic salary, paid in US dollars, of $31m (£20.9m) plus extensive bonuses.
Depending on how many races he wins, and whether he becomes world champion, these bonuses could easily take his annual earnings well over $40m (£27m).
Source:BBC
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