The Rockets superstar guard is expected to sign a four-year, $160 million max contract to stay in Houston, ESPN's Adrian Wojnarowski reported.
Paul announced on Twitter that he has "Unfinished Business" in Houston, which took Golden State to seven games in the Western Conference finals.
He missed the last two games of that series with an injury, and the Rockets wasted big leads in both of those games.
Paul averaged 18.6 points and 7.9 assists last season with the Rockets, who went 65-17 led by Paul and newly minted NBA MVP James Harden.
The Associated Press contributed to this report.