The Indianapolis Colts' decision on whether to keep Peyton Manning will have to be made by Friday at 4:00 p.m. ET, the NFL Network reported Tuesday.
The Colts have until Thursday to pick up a $28 million option on Manning's contract for next season. It is believed to be unlikely that the Colts will choose to pay the 35-year-old Manning that amount, since he missed the entire 2011 season following several neck surgeries.
Colts owner Jim Irsay has expressed interest in bringing the four-time MVP back to Indianapolis at a much lower salary.
Negotiations on a new contract could continue up until Friday afternoon. After that point, the Colts would be on the hook for a $28 million "non-exercise" fee for not picking up the option.
The team could opt to announce they are releasing Manning at any time between now and Friday.
If Manning is not retained by the Colts he would become a free agent when the NFL year begins March 13.
Manning has been working out in recent weeks at Duke University, where his former offensive coordinator at Tennessee is the head coach.
There have been varying reports on Manning's current health, with the most significant question being how close his arm strength is to returning to normal.
Manning's father, Archie, said last week his son "looks fine" on the field, and on Saturday a short video was released of Manning throwing to Colts receivers Dallas Clark and Austin Collie in an "aggressive throwing session."
The Colts are expected to use the first pick in April's draft to select former Stanford quarterback Andrew Luck, regardless of whether Manning is still in the fold.