The German's current contract runs out at the end of 2006, but the Ferrari player told Germany's 'Welt am Sonntag' that Schumacher, 37, 'will continue'.
The newspaper did not name the vocal Ferrari team member, but he was also quoted as saying that the seven time title winner had 'had enough' of the constant speculation about his future.
Schumacher will not formally announce his decision until mid-season.
The source said: ''It appears that no one has realized that (Michael) can't imagine a life without racing.
''He wants to race and he will race.''
After a mixed opening stint to the 2006 season, Schumacher and Ferrari will be hoping for a turnaround on Italian soil next weekend.
Michael cancelled his planned trip back home to Switzerland to try a revised package at Vallelunga last week, including a new engine spec and the full evaluation of cooler-weather Bridgestone tires.
Revealing that he will also test this week in Barcelona, he told La Gazzetta dello Sport: ''Compared to the first races, Imola is another world.''