The Bulgarian, joint-top goalscorer in last season's Barclays Premier League, followed up a cheeky backheel at Fulham with a splendid hat-trick in the Boxing Day win over Wigan.
Sir Alex confirmed that the champions will be exercising the option to extend the former Spurs striker's deal until the end of the 2012/2013 season with the paperwork due to be finalised in the first few months of next year.
"We'll be exercising (the option to renew]," stated the manager. "I think it kicks in in March."
Berbatov will be keen to start against Blackburn on Saturday and continue his scoring streak after slamming five goals past Rovers in the fixture last season.