The 21-year-old midfielder will now hold talks with the Magpies over a permanent move to St James' Park
Joe Willock is edging towards a move to Newcastle after Arsenal agreed a fee of around £25 million ($35m) with the Magpies for the midfielder.
The 21-year-old has been the priority target for Steve Bruce all summer following his superb loan spell at St James' Park last season, which saw him end the campaign by scoring in seven successive Premier League games.
But talks between the clubs have proved slow going, with Arsenal looking to strike a permanent deal for their academy product, while Newcastle had preferred to land him on another loan.