HITC Sport understands Millwall have tied up a deal for the Northern Ireland international.
Ferguson has been on loan at Millwall since the start of the season, but his stint expired following last weekend's win over Chesterfield.
Millwall were keen to land Ferguson on a permanent basis, but the move was held up as Ferguson looked to secure his release at Newcastle with the player out of contract at St James' Park at the end of the season.
Ferguson has now sorted out his departure from Newcastle and he has signed an 18-month deal at Millwall.
The 24-year-old was happy to leave Newcastle as he was well down the pecking order at St James' Park, and Ferguson was keen to be playing regular first-team football as he looks to keep his spot in the Northern Ireland side ahead of this summer's Euro 2016 finals.
Ferguson made 28 appearances during his loan at Millwall and he will now stay at the club and help them in their bid to win promotion to the Championship
His signing will come as a major boost to Millwall boss Neil Harris as he had made securing the winger long-term one of his top priorities during this month's transfer window.