The 22-year-old has agreed terms on a bumper new deal following talks with owner Todd Boehly, according to The Athletic.
He's expected to officially put pen-to-paper on the multi-year contract within the next few days and commit his future to the Stamford Bridge outfit.
In doing so, James will become the highest-paid defender in the club's history.
The right-back currently earns a reported £58,000-a-week, but his new deal will see him pocket a wage in excess of £200,000-a-week.
Summer signing Wesley Fofana, who joined Chelsea from Leicester City in a transfer worth £70 million, is understood to be earning £200,000-a-week.
But James is set to be on a higher wage package than his new French teammate once he signs his new Chelsea contract.
He's also set to earn more than club legends John Terry and Ashley Cole.
James has become a key player for Chelsea following his loan spell at Wigan Athletic in the 2018/19 season.
He's been an ever-present since making his debut for the club in 2019.
James is widely regarded as one of the best right-backs in world football, having been a consistent performer over the years.
He's also an England regular, making his international debut in 2020 - earning 13 caps in his career.
Featured Image Credit: Alamy/Instagram
- Thiago Silva claims Reece James can become 'one of the best players in history'
- Wilfried Zaha fires back at Reece James after social media taunt, then deletes post
- Cristian Romero screamed in the face of Reece James after Harry Kane's equaliser
- Reece James' highlights for Chelsea vs AC Milan are sensational, he's the best right-back in the world