Antonio Conte has remained convinced the Spain international’s future remains in west London.
Last month, a switch to the Chinese Super League looked on the cards following a bust-up between Costa and Conte.
However, they held clear-the-air talks with the 28-year-old back in the first XI at Stamford Bridge.
And according to The Sun, Costa and his representatives has reached an agreement in principle over a new contract.
Diego Costa is Chelsea's top scorer this season with a Premier League title within reach
Antonio Conte's hilarious reaction as Simon Mignolet saves Diego Costa penalty
Wed, February 1, 2017
Antonio Conte found it difficult to hide his emotions after Simon Mignolet saved Diego Costa's penalty during Chelsea's 1-1 draw with Liverpool at Anfield
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Antonio Conte couldn't hide his emotions after Diego Costa's penalty miss
The deal is apparently worth £220,000 a week plus bonuses for the next five years
The deal is apparently worth £220,000 a week plus bonuses for the next five years.
That amounts to £57m for Costa, which could rise to £65m including the potential add-ons.
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Tianjin Quanjin were ready to offer him a £30m-a-year deal come the summer.
But his long-term future seems set at Chelsea, with the hitman to leapfrog Cesc Fabregas as the club’s biggest earner.