Reo-Coker, now captain of the England U-21 internationals, joined the club from Wimbledon in January 2004 for a fee around £500,000.
Last week Nigel’s representative Tony Finnigan told SkySports.com, “Nigel is very happy at West Ham and is more than happy to stay.
“He is looking forward to being part of the club's future.
“Nigel wants to help the club's rejuvenation as he has already played a big part in getting them to where they are now.
“He is delighted that terms have been agreed and we are now just waiting for the paperwork to be sent through.”