Hughes is currently contracted until 2004, but the FAW is keen to secure his services for another two years.

President Des Shanklin refused to give details about the size of the salary involved, but the deal will almost certainly make Hughes the highest paid manager in Welsh football history.

Negotiations with Hughes have already begun, and Shanklin said everything should be finalised in time for Italy's visit to Cardiff next month.

"He's had wonderful career as a player and his passing on his experience to the young players.

"He has done an unbelievable job since he took over. It's been fantastic - there's no doubt about it."

He added: "I can assure everyone that Mark Hughes will be the Wales team manager for a few years to come."

Despite a difficult start to his international managerial career which saw Wales going 12 matches without a win, Hughes has now found a winning formula.

The 2-0 win against Finland in their opening Euro 2004 qualifier on Saturday stretched the side's unbeaten run to six matches.

Hughes, though, still needs resolve the issue of Mark Bowen's continued involvement as his assistant.