What should I do if I am currently in a Muta contract for 2 years but want to marry her before the contract ends? Should I terminate the Muta contract and how may I do so?
Bismihi ta'ala
You must free her for the remaining period, then do the permanent Nikah. You say to her "I free you for the remaining period," then she becomes non mahram, and then you can do the Nikah. She does not need to observe 'iddah period as well, because she was with the same person, yourself.
And Allah knows best