Valencia is hoping to negotiate a new fee and then agree to annually alternate a spot on the formula one calendar with Spanish grand prix host Barcelona.
Whether the Spanish cities will ultimately share just one Spanish date on future grand prix calendars is a long-running saga, but the latest reports indicate talks are still ongoing.
Barcelona officials played down the likelihood of a deal when it hosted its race at the Circuit de Catalunya earlier this month.
But Valencia’s regional government, the Valencian generalitat, said through its vice president Jose Ciscar: "We are negotiating a discount for it (the F1 race).
"When it is closed, I believe that we can sign the contract between the three parties," he told the Spanish news agency EFE, referring to Valencia, Barcelona and F1’s Bernie Ecclestone.
Ciscar said F1 could therefore return to Valencia in 2014, adding: "But I’m very cautious.
"When we can announce that the deal is done, it will be announced."