The 19-year-old, whose current contract expires at the end of the season, has enjoyed an impressive breakthrough campaign with the Baggies after initially catching the eye of Slaven Bilic in pre-season training.
Ferguson has made 13 Championship appearances this season – with the youngster performing well at both right-back and left-back.
But those displays have led to interest from elsewhere with Tottenham and Crystal Palace reportedly readying bids when the transfer window opens in January.
As well as that interest from the Premier League, Juventus and Atletico Madrid have also been linked with the defender.
Albion, though, believe it’s in the best interests of the player to sign the attractive five-year deal on the table. Having been at the club since his was eight and with his family local, they feel The Hawthorns is the best place for his development.
But should Ferguson move abroad, The Baggies will only be entitled to compensation of around £300,000 under FIFA guidelines.
With Ferguson set to a command a substantially higher transfer fee should he join an English club in January, Albion will have no option but to consider selling him if he doesn’t commit to a new deal.
And a bidding war could be sparked if both Tottenham and Crystal Palace sure up their interest.
Palace are known admirers of the teenager – with Sporting Director Dougie Freedman having regularly been spotted watching Albion’s games.
The Eagles are also in need of a right-back after selling Aaron Wan-Bissaka to Manchester United in the summer for an initial £45million.
Spurs are also in need of a right-back to compete for a starting spot with Serge Aurier.
The London club also want to freshen up their squad having won just three of their 12 Premier League matches this season.
Meanwhile, the Express & Star understands there is no truth in reports that Manchester United are monitoring Albion loanee, Matheus Pereira.
The Brazilian, who is on loan from Sporting Lisbon, has already agreed terms for a permanent transfer to the Hawthorns.
And that deal will be completed with the Baggies having the option to sign the player for £8.25million at any point.