The 31-year-old will receive the contract that would keep him with the South Coast club until June 2005.
Fletcher, who made his 20th appearance this season for The Cherries in the FA Cup win over Bristol Rovers on Saturday, penned a one-year deal in the summer until June 2004.
He was initially promised a one-year extension once he reached 20 appearances this term and having done so, Cherries chairman Phillips is ready to hand the striker a new contract as promised.
"Steve was looking for a long-term contract but we were only prepared to offer him a one-year contract in the summer on the back of his injury," Phillips told the club's official website.
"But he has shown not only has he played all 20 games this season but that he is looking so fit and is in such good form.
"We're very pleased that as a result of the fact he is so fit and playing such a big part in the team, we will be honouring our commitment to offer him a further contract next year.
"When we come round to negotiating contracts for next season, there will definitely be one on the table for him."
