News Limited reports Formula 1 insiders believe a new race contract for the event is on the cusp of being signed after positive talks between F1 head Bernie Ecclestone and Grand Prix chairman Ron Walker at this weekend's Singapore GP.
The "well-placed F1 source" reportedly said an offer was on the table with the deal being "pretty much done".
Requiring approval by the Victorian government and Premier Denis Napthine, the new contract hopes to improve on the current arrangement and better the situation for the state's taxpayers.
Premier Napthine told the publication he would support the event being in Melbourne but not at any price.
"We've got Ron Walker in negotiations with Bernie Ecclestone and his group," Napthine said.
"We want to get fair value for the taxpayers' dollar.''
The Victorian premier said his government was happy to negotiate an extension of the current contract, though, no deadline for any final decision on whether to keep the event in Melbourne for the long-term had been set.
"But my message to Bernie is that we want a fair deal for Victorian taxpayers," Napthine said.
"And we certainly won't be paying exorbitant fees to Bernie or anyone else.''
The AGP moved from Adelaide to Melbourne in 1996 and this year cost a reported $93 million to stage. With licensing fees previously reported at more than $30 million a year, the event lost $50.67 million in 2013 – subsidised by taxpayers – and $56.6 million in 2012.