Formula One world champion Lewis Hamilton is close to finalizing a new deal with Mercedes, team principal Toto Wolff said.
The Brit, 33, has reportedly been nearing a new deal with the team for several weeks, but the parties are yet to finalize terms.
However, Wolff said on Friday that he expected a deal to be done, with the last details being finalised.
"We have been discussing before going into the winter holiday and then we kind of left it there to get away from Formula One and picked it up again in January," he told a news conference at the Australian Grand Prix.
"These discussions are going in the right way. We are about to finalize the last topics and there is no reason to not think that's going to happen soon.
"He's in a good frame of mind. I've seen him come back strong from the winter."
Hamilton is a four-time world champion, trailing only Michael Schumacher (seven) and Juan Manuel Fangio (five) for the most titles.
He showed good signs in the opening session of the 2018 season, topping first practice in Melbourne.
Hamilton's time of one minute, 24.026 seconds was 0.551secs quicker than his Mercedes team-mate Valtteri Bottas.
Red Bull's Max Verstappen and Ferrari duo Kimi Raikkonen and Sebastian Vettel completed the top five.
INITIAL CLASSIFICATION - END OF FP1
— Formula 1 (@F1) March 23, 2018
Hamilton's title defence begins with the top time in the first session
It's so good to be back!#AusGP #F1 pic.twitter.com/ijpT1stlUy
Horner, Arrivabene clash over Ferrari's recruitment from FIA
Christian Horner has taken exception to Ferrari's appointment of a former FIA official but Maurizio Arrivabene insisted the Italian constructor did nothing wrong.
Red Bull boss Horner and his Scuderia counterpart Arrivabene, along with Mercedes chief Toto Wolff, faced the media on Friday ahead of the season-opening Australian Grand Prix.
Earlier this month it was announced the FIA's safety chief and deputy race director Laurent Mekies would join Ferrari, drawing comparisons to last year's development that saw the governing body's F1 technical director Marcin Budkowski take up a position at Renault.
Horner claimed that after Budkowski's switch, all F1 teams agreed that any FIA member joining one of the constructors should have to take a year's gardening leave, to avoid any possible conflict of interest brought about by an immediate change.
But Arrivabene countered that no such agreement had been made, as he defended Mekies' move.
"There is nothing wrong with that," he said. "We were respecting absolutely local law, the Swiss local law, where Laurent was hired. Afterwards we went even further than that because we gave him six months of gardening leave.
"However, having said that, what we have discussed before is that we have signed a confidentiality agreement that means we are not allowed to discuss or share in public what we discuss there.
"Having said so, I heard comments related to a supposed or so-called 'gentlemen's agreement' and I think they are [just] comments because a 'gentlemen's agreement' under labour law is illegal. I thought they were comments, just comments and no more than that."
There was a hint of tension in the air earlier today at the FIA press conference at the #AusGP
— Formula 1 (@F1) March 23, 2018
Feisty exchanges between the @ScuderiaFerrari and @redbullracing bosses... with @MercedesAMGF1's Toto Wolff in the middle
Full story https://t.co/KvegC6Nid5
That prompted Horner to counter: "For me it is a big deal because the disappointing element about this is that we have a thing called the strategy group where the FIA, FOM [Formula One Management] and all team principals attend and we discussed the Marcin issue where there was great unrest about a key member of the FIA going to a team, in which case it was Renault.
"Renault diluted that by putting him on an extended gardening leave but then ensued a conversation about it being unacceptable - every team found it unacceptable.
"There was an understanding and a clear statement by the teams to say, right, let's have a clear position that there should be at least a period of 12 months in the garden for a member of a team going from either FIA or FOM to a team or from a team to vice-a-versa.
"What's most disappointing about it is that it was Ferrari, or Sergio [Marchionne, Ferrari president], who was pushing for a three-year period.
"On one hand you get a team pushing for a three-year gestation and then a few weeks later we are in this situation. It makes discussions in that forum a waste of time."
Ricciardo given three-place grid penalty
Daniel Ricciardo has been given a three-place grid penalty at the Australian Grand Prix after a red flag infringement in practice on Friday.
During FP2 in Melbourne, the Red Bull driver was adjudged to have failed to "stay above the minimum time set by the FIA ECU [Electronic Control Unit]" in the final two sectors.
Ricciardo "admitted an error in reading his dash", according to a statement released by race stewards, which went on to say that the Australian was found to have "slowed significantly".
In light of that, the officials "imposed a lesser penalty than usual", which included two penalty points.
Friday's developments are the latest in a series of hard-luck stories for Ricciardo at his home GP, after he finished second in 2014 but was then disqualified for a mechanical issue.
Last year, Ricciardo crashed in qualifying and was forced to retire midway through the race.
Third DRS Zone added; could improve passing
For the first time in a Formula One race there will be three DRS zones in the season-opening Australian Grand Prix on Sunday.
Tracks usually have either one or two designated areas where drivers within a second of a rival car can activate the DRS.
There should be plenty of scope for overtaking at Albert Park, as a third zone has been added on the exit of the quick Turn 12.
If they are unable to take advantage of that temporary speed advantage, the drivers will soon enter another DRS zone after the final two corners of a circuit where it tends to be difficult to pass.