The 43-year-old is now the preferred candidate for the Saudi-led owners after Unai Emery distanced himself from the post in the last 12 hours.
A Newcastle source has told Football Insider that the club are negotiating terms with Howe this morning and are increasingly confident of appointing him.
But the Villarreal manager is said by countryman and BBC journalist Guillem Balague to have rejected the post after feeling uncertain about the club’s strategy.
In the latest extraordinary twist, Newcastle have turned quickly to Howe, the former Bournemouth manager who took the club from League Two to the Premier League and kept them there for five seasons.
Should talks result in a full agreement, he is expected to be appointed in time to oversee Saturday’s Premier League clash against Brighton.
Significantly, Howe is willing to work alongside Graeme Jones, the caretaker manager set to stay on whoever is appointed.
That is believed to be a critical factor at St James’ Park, where Jones has emerged as respected coaching figure who has the backing of the players.
He rejected the Celtic job due to misgivings about heading north of the border following an unhappy experience at Burnley a decade ago.