Partey, 27, has been tipped to swap Madrid for London and join Arsenal this summer.
However, a new report from his homeland of Ghana claims he is poised to sign a double-your-money deal with Atleti.
The deal will also increase his release clause from £43m (€47.38m) to £87.2m (€96m).
Central midfielder Partey has spent his entire professional career on the books of Atletico after arriving in 2011.
According to GHANASoccernet.com, Atleti chiefs led by Enrique Cerezo have ‘found a common ground’ with Partey.
As a result, Partey is set to sign a new contract in the coming days, delivering a major blow to Arsenal’s transfer plans.