Press Association Sport understands the Magpies and Paris St Germain reached an agreement in principal for the transfer of the 28-year-old France international on Monday night following whirlwind negotiations.
PSG, who had a £14million bid rejected on Sunday, made a significantly improved offer - which will remain undisclosed by both parties - to finally get their man.
Newcastle owner Mike Ashley, who had valued the midfielder at around £20million, ultimately decided to do business with Cabaye desperate to play on Europe's biggest stage once again after sampling Champions League football with former club Lille.
The Frenchman, who was preparing for the Magpies' Barclays Premier League trip to Norwich on Wednesday night when the deal was struck, will now travel to his native country to undergo a medical.
His seemingly inevitable departure will come as a huge blow to manager Alan Pardew, who despite voicing his hope that the player would stay on Tyneside, had admitted earlier in the day that he was not confident of him doing so.
Pardew said: "Listen, we are a club that unfortunately at the minute, is not in a Champions League position, so therefore players can turn around to us and say they want Champions League, as [Luis] Suarez did with Liverpool.
"He stayed, Suarez, and they have got themselves in a position for the Champions league, but they wouldn't be there without him.
"It's a Catch 22 situation: you need to keep your best players to get in there and likewise, they want to play in there, so you have got to give them some hope.
"That's the position we really need to get ourselves into this year, or definitely next year or the year beyond.
"We have got big players, we attract good players, but we are not in a Champions League position or are able to say at the minute, 'We could be Champions League, stay with us and get the football here'.
"We are just a little bit off it. Maybe if we had got a couple more results in January, I could turn around to players and say, 'Well look, say until the summer and we could be Champions League ourselves'.
"But it's probably difficult to say that with the other teams who have just kept winning, unfortunately."
Cabaye's loss would not go down well on Tyneside among fans who crave a return to the big time, and saw him as a central character in that quest.
However, for owner Mike Ashley, it would represent good business with the player having cost the club just £4.3million when he moved from Lille during the summer of 2012.
He was the subject of a failed £10million bid from Arsenal last summer, and although he has to rebuild bridges with supporters after reportedly going on strike afterwards, Pardew welcomed him back to the fold and reaped the rewards.
The manager said: "He has been a great player for this football club, and I think he has got better in this role that I have given him this year. He's playing number 10 for us and he's really taken to it.
"It's boosted his confidence and boosted his value as well, I think."
Pardew's main focus in the short-term remains the three points at stake at Carrow Road and the business of attempting to build on the club's current eighth-place standing, and thereafter righting the wrong of back-to-back derby defeats when Sunderland head for St James' Park on Saturday.
But in the meantime, he will hope Ashley and director of football Joe Kinnear will invest a significant proportion of the proceeds of the Cabaye deal in a replacement.
Montpellier's Remy Cabella is a player they have been tracking, although he would not plug the gap directly, but Pardew insists there is a contingency plan aside from their interest in Borussia Monchengladbach striker Luuk de Jong.
However, supporters who saw Andy Carroll sold to Liverpool on the final day of the 2011 winter window with no-one arriving in his place remain sceptical.
But asked if Cabaye would be replaced, Pardew said: "We would need to bring somebody in, for sure. You can't lose a player of that quality and not replace him."