Lyon are set to open talks with Fred over a new deal at the Stade Gerland, according to president Jean-Michel Aulas' chief advisor Bernard Lacombe.
Fred came close to leaving the French champions in last season's January transfer window but ended up staying, pledging his short-term future to the club.
The Brazil striker recently revealed he is once again considering moving on after finding himself on the receiving end of jeers and taunts by Les Gones fans.
However, things are changing for the better for Fred who is showing glimpses of his old form. He followed up last week's brace in the Champions League against Steaua Bucharest with the winning goal against Monaco at the weekend.
"The president - Jean-Michel Aulas - spoke to him after the game against Bucharest then once again on Saturday at Monaco about sorting out a meeting," Lacombe told the club's website.
"With (coach) Claude Puel, we are going to meet him to let him know about our interest, about our desire to extend his contract."