The Texans will exercise their fifth-year 2021 club option for quarterback Deshaun Watson, the Houston Chronicle reported on Monday.
The option is projected to cost $17.3m, however negotiations for a long-term contract with the two-time Pro Bowl selection are expected to ramp up soon.
Watson, 24, is scheduled to make $4.4m in 2020 after earning $3.8m last season.
After signing left tackle Laremy Tunsil to a three-year, $66m extension on Friday, Texans coach and general manager Bill O'Brien expressed optimism about ultimately reaching a deal with Watson.
"Look, I think any time we can try to get something done with Deshaun would be great, but again, these things take time," O'Brien said.
"I don't want to get into all the details of it. I know there's a lot out there about where we are. We have a great relationship with Deshaun, we have a great relationship with his agent.
"Very good open lines of communication. Really haven't gotten into the details of anything right now, but obviously we want Deshaun Watson to be the quarterback here for a long time, so we'll see how it all plays out."
Watson is 24-13 as a starter for the Texans. He has completed 66.8 per cent of his passes for 9,716 yards with 71 touchdowns and 29 interceptions over the past three seasons. He has also rushed for 1,233 yards and 14 scores.