The NBA and National Basketball Players Association have agreed in principle to extend the Dec. 15 deadline that each side has to give notice of plans to opt out of the collective bargaining agreement at the end of the 2022-23 season, sources told ESPN on Friday.

Talks on a new CBA are ongoing, and a formal ratification of an extension -- likely into February -- is expected to come at a virtual board of governors meeting Wednesday, sources said.

The current seven-year CBA expires after the 2023-24 season, but the possibility of either side opting out of the agreement leaves the NBA vulnerable to a work stoppage on July 1, 2023. Pushing back the date to inform the other side of an opt-out allows the league and union to continue to pursue a new, long-term labor agreement.

In talks, the NBA is pursuing the implementation of an upper spending limit, a systemic change that has been met with significant union resistance, sources said.

In the wake of large-market contenders like the Golden State Warriors, Brooklyn Nets and LA Clippers running up massive payrolls and luxury tax penalties, the NBA is proposing a system that would replace the luxury tax with a hard limit that teams could not exceed to pay salaries, sources said.