The frontman has been in the form of his life this season, notching 30 goals already and the Eagles were keen to tie him down to a longer deal, with his current contract due to expire at the end of next season.
And manager Ian Holloway revealed in his weekly press conference on Thursday morning that the club and the hitman had agreed a deal in principle.
A delighted Holloway said: "Glenn Murray has agreed a new three-year contract, which is great news for this club."
The Advertiser spoke to Murray on Tuesday when he admitted he was "happy" to stay.
He said: "I'm happy at the club and I wouldn't be scoring goals if I wasn't.
"I feel that if you're happy off the pitch, you play well on it – I am enjoying my time at Palace."
Last Sunday, Murray was pipped to the Championship player of the year award by Watford's loan striker Matej Vydra, who has scored nine league goals fewer than the Eagles frontman.
But despite the disappointment felt by everyone at Selhurst Park, Murray says "it's no big deal" and wants to concentrate on hitting his season targets.
"It was just nice to be nominated if I'm honest," he said.
"To be nominated as one of the top three players in the division was an achievement in itself.
"I was disappointed I didn't win but it's not the end of the world and I'll just carry on – I'm not going to lose any sleep over it.
"It would have been nice to win, but I haven't, so it's no big deal and I'll just get on with it.
"The decision doesn't necessarily motivate me more and I haven't been scoring goals to win that award.
"It would have been something nice along the way, but my attitude to scoring and missing out on that award won't change that – I still want to score goals."
When questioned on what those personal targets were, including whether he can hit the 40-goal barrier, Murray admits it will be tough to do that in what he describes as "one of the best" campaigns he's experienced.
"That would be a big ask with just eight games left," he said.
"I do have targets but I'll keep them to myself – hopefully I can reach them and I'll let everyone know after.
"I think this season is definitely one of the best in my career.
"We've got to finish it off now and our side is one of the best, but without the goal of promotion, it won't mean quite as much."