The French midfielder's current deal expires at the end of the season and some rumours suggested that he would leave the club in the summer following Yohan Cabaye's recent arrival from Newcastle United.
"I am very happy here," Matuidi told Canal +. "The new contract will happen soon - do not worry.
"Having competition is the sign of a great club and it will help the team."
Matuidi joined PSG from Saint-Etienne in 2011.