The Englishman has been in charge of the 'Cherries' for eight years in total - two spells sandwiched either side of a season-and-a-half at Burnley.
As reported by 'The Mirror', the deal will see Howe earn £3m per year with bonuses, which would see the 40-year-old double his current salary and become one of the highest-paid homegrown managers in England, alongside Roy Hodgson, Chris Hughton and Sean Dyche.
The new contract will also include a large compensation clause if the coach should leave for another club.
Howe and Bournemouth's next match comes on Saturday, at home to Leicester City.