Gannon has revived the Hatters since being handed the Edgeley Park hot-seat in January 2006 and guided the club to promotion from League Two last term.
He is currently on a one-year rolling contract but could agree a long-term deal with the club on Friday.
"A few details need tidying up, and then a few incentives need to be put in place regarding the ambition of the club, which is to get into the Championship," he said.
"It all should be pretty straightforward. Like I've said before, I'm very committed to what we're trying to achieve here. For me, the new contract is not a priority."