But O'Neill is keen to reward Milner for his superb form this season and also secure his services on a long-term basis.
Milner is a strong candidate to be part of the England World Cup squad after impressing Fabio Capello.
O'Neill confirmed: "I said to James couple of months ago that we would sit down in the summer about a new contract, regardless of whether he plays for England or not (at the World Cup).
"He is playing so well, it would be important that we do something if we can. By the time the summer arrives, he would be exactly halfway through his contract so it is not a bad time to do something.
"We will sit down in the summer, I said that way back before January. I said it to his agent. That is fine. They have never pushed or asked for anything and they are absolutely okay with that.
"This is not because of what he may or may not do for England. Everything that he does in an England shirt at the World Cup - if he goes to it and I'm sure he will - may eventually have a determining factor on it.
"But the idea of sitting down with James regarding his contract is because of what he has done for us."
O'Neill has been delighted with the way Milner has successfully switched from a wide right role into a central midfield slot during the past few months.
He added: "Without doubt, James has been fantastic. I thought his performance on Tuesday night at Wigan defied belief.
"I actually said to him in the summer that central midfield is where I could see him playing. I know sometimes when you are wide you are depending on other people getting you the service.
"I felt James had more to offer than just playing wide left or wide right. He did it very well for us but I felt he could come and play in midfield.
"I am pleased that we have done it because it has given him more options and in a World Cup year it has thrust him right into the forefront of things when he has absolutely excelled."
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