Six-time Grand Prix winner Ricciardo has become the hottest free agent on the Formula One circuit following his victory in China 10 days ago.

"We do not want to wait forever. We have other good options," Horner told German magazine Auto Motor Und Sport. "There should be a decision by the summer (August) break at the latest."

Horner said the team wants Ricciardo to stay at Red Bull but if it didn't happen they would look elsewhere.

"Our priority is to continue working with Daniel. If that does not work, we'll pull the other options," Horner said. "The most obvious is Carlos Sainz. He is under contract with us. And then there are a few young drivers," he said.

Ricciardo is believed to have begun talks with Ferrari, with both parties locked into negotiations until June 30, according to Motorsport magazine. Reigning champions Mercedes are also reportedly interested.

Ricciardo has previously said he does not want his next Formula One contract to tie him down. Instead of the usual four-year-deal, Ricciardo said he wants a two-year contract due to the uncertainty over the sport's future direction.

Formula One's current engine regulations last only to the end of 2020, when team agreements also expire, and the sport is deciding how the future should look and what kind of engines will be used.

Ferrari have already warned that they could walk away if they do not like what is on offer.

"Each year something might change so I don't want to tie myself down for four more years and then I'm like, 'I don't want to do this anymore," Ricciardo told The Times.

Meanwhile, Mercedes have yet to announce a new deal for four-time world champion Lewis Hamilton, who is also out of contract at the end of this season.