Coleman has established himself as a key player at Everton since arriving from Sligo Rovers for £60,000 in January 2008.
The 24-year-old's current deal runs until 2015, but Everton are keen to reward with him with an extension.
Coleman, who can play at right-back or on the wing, has been instrumental in Everton's fine form this season with a number of impressive performances.
The versatile performer has also established himself as a regular in Giovanni Trapattoni's Republic of Ireland squad over the last six months.
It is believed Coleman had a clause in his contract entitling him to a new deal once he made a certain number of appearances and he is now thought to have passed that threshold.
Coleman's representative, Hayden Evans, confirmed talks were ongoing and that he was hopeful of a successful conclusion.
"We have held positive talks with Everton and I am confident there will be a positive conclusion soon," Evans told reporters.
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