The two clubs had agreed a fee of around £5m for the 29-year-old.
The two sides have agreed a fee of around £5m for the Ivory Coast international, but Sky Sports claims that the midfielder's wage demands were preventing a deal being done.
Tiote has struggled for opportunities and form this season, making just 11 appearances in the Premier League. While he is most utilised in a holding midfield role, and is thus not expected to contribute many goals, his inability to protect the back four when he has been selected has contributed to Newcastle boasting one of the leakiest defences in the division.
As well as Tiote's performances on the pitch, Steve McClaren will probably be hoping that a deal can be resurrected as he has already moved to strengthen his options in the middle of the park during this window, with Henri Saivet arriving from Bordeaux and Jonjo Shelvey joining from Swansea.
And with both of the new signings featuring during the victory over West Ham last weekend, it appears that even if Tiote does not leave this month, his days as a Newcastle player are numbered.