Alan Pardew is looking to bolster his attacking options following a frustrating run.
The 26-year-old's contract expires at the end of the season (via The Sun), and while the Hoops may have previously set a higher asking price, they have arguably lost their advantage in any negotiations due to their struggles in the Championship.
Rangers may have hoped that an instant return to the Premier League may have convinced Austin to sign a new deal. However, with promotion now looking very unlikely, Rangers are arguably faced with a choice of whether to cash in this month, or face losing him for nothing in the summer. And with the club well behind the top six, they may decide that it is pointless keeping Austin when all the side may be able to do is move up a handful of places in the table, which is still unlikely to be enough to earn a play-off spot.
The opportunity to move to Selhurst Park is likely to be of great interest to Austin. While the Eagles sit in the Premier League's top seven, their recent run - which has seen them fail to win, or score a goal in any of their last three games - has confirmed their need for a new striker.
Connor Wickham's goal against Stoke was the only time a recognised striker has scored for the club in the league this season, and while the former Sunderland man's overall contribution deserves credit, not adding another forward during the transfer window may see their current run continue.
Joining the Eagles would allow Austin - who has 10 goals in the Championship this term - to join a high-flying side in the top flight, but also be their first-choice forward, which is an opportunity he may not have expected to have offered to him.