The 22-year-old is currently earning less than £10,000-a-week at White Hart Lane.
The Sunday Mirror reports that Spurs are ready to hand the winger a new deal that will see his annual salary increase to around £2million.
Townsend signed a new five-year contract with Spurs two years ago.
The winger scored in England’s 4-1 victory over Montenegro in a World Cup qualifier on Friday night.
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The start of the 2017-18 Premier League season is just around the corner and is shaping up to be one of the most competitive yet.
As always it is the so called “big clubs” that have splashed the most cash in the transfer window so far this summer. Manchester United or City? Arsenal or Tottenham? Who are the winners and losers of the transfer window so far?