Although some specifics still need to be worked out, a deal is expected to be reached in January, according to a source with knowledge of the situation.
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"Because of the trust we have in each other, [Angelos] knows I am not going anywhere," said Showalter, whose initial contract expires after the upcoming season. "He has expressed interest in doing something and I've expressed interest in staying. And we think that can happen."
Angelos could not be reached for comment.
Showalter and Angelos have developed a strong relationship since the manager was hired in 2010, meeting occasionally during the season to talk about the club.
Showalter, 56, previously said this offseason that since he is already under contract for 2013, he was not making his future employment a priority. When asked about Showalter's future with the Orioles after the club lost to the New York Yankees in the fifth game of the 2012 American League Division Series, Angelos said "nobody's more interested in keeping him than I am."
The Orioles were 93-69 this year under Showalter, making their first playoff appearance since 1997. In Showalter's two-plus seasons in Baltimore, the Orioles are 196-185, a .514 winning percentage, which is seventh all-time for modern day Orioles managers.
In 2012, Showalter finished second in the American League Manager of the Year voting, losing a close race to Oakland's Bob Melvin. The last Oriole to win the award was Davey Johnson in 1997. Johnson resigned on the day of the announcement in a contract dispute with Angelos.
History is not expected to repeat itself this time around.