No details as to the size and length of the deal have been officially released.
But Spanish media are reporting that the Portugal star's extended contract will run to 2018 and will give him an annual salary of 17m euros (£14.25m).
Ronaldo, 28, is set to appear at the club's Bernabeu stadium with president Florentino Perez at 12:45 BST on Sunday.
The new deal should end speculation he is looking to leave the club following the arrival of world-record signing Gareth Bale from Tottenham earlier this month for 100m euros (£85.3m).
Ronaldo, who joined Real from Manchester United in 2009 for what was then the highest fee of £80m, has scored 203 goals in as many games for Los Blancos.
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