It is understood the 54-year-old former England and Derby County boss has concluded talks following a short holiday, after the crux of negotiations took place last week.
McClaren has been the long-term favourite to take over from John Carver, who is likely to revert to his former position as assistant coach following talks with managing director Lee Charnley last Tuesday.
McClaren had been in charge at Derby since September 2013 but was sacked by the Sky Bet Championship club at the end of the season having failed to secure a place in the play-offs, finishing eighth in the table after an embarassing final day defeat.
Former FC Twente boss McClaren was linked with the Newcastle job when Alan Pardew left in January and was also under consideration at West Ham after Sam Allardyce left at the end of the season.
Patrick Vieira,??an elite development coach at Manchester City, had also been under consideration by Newcastle but talks were quickly concluded with Viera remaining at City.