The Frenchman turns 31 next week, and whilst Wenger has offered more than a single year deal, Sagna is still considering his options.
Although the Arsenal chief 'expects' him to stay, he admits they are 'not close at the moment'.
"When I say I expect, it's more that I want (him to stay),” said Wenger in the Daily Mirror. "I hope that in the end I am right.
“He wants to keep his options open, because he is at the end of a contract. It is an important contract for him. He is 31 years old. I can understand."
Wenger has often utilised a policy of only offering single year contracts to players over 30.
However, Wenger says the club will offer Sagna more than one season.
"Because he is a defender we are ready to give him more than one year," he said.
"I’m not alright with that (Sagna keeping his options open) because I would like him to sign just now but I have to accept it. It is his freedom - the decision belongs to him.
"We are always in negotiations with him and we try always to be fair with him. I believe his future is here and any other decision would be wrong."
Since his move to the Premier League, the France international has been arguably the most consistent right back in the division, and his performances this year alongside the likes of Per Mertesacker and Laurent Koscielny have helped the Gunners establish a water-tight defence.
Sagna's first duty will be to stop Luis Suarez and company at Anfield as Arsenal look to reaffirm their title credentials.