HITC Sport understands that talks are ongoing as they prepare to axe Steve McClaren.
Newcastle will offer Benitez an initial short-term deal with the mandate of keeping them in the Premier League, but the Spaniard has suggested he would be willing to stay in the 'long-term'.
HITC Sport exclusively revealed last week that Benitez was willing to listen to Newcastle, and now the North East giants have made their move.
Managing director Lee Charnley and chief scout Graham Carr both believe Benitez is the best candidate, but they needed the approval of owner Mike Ashley - who HITC Sport understands is currently out of the country, and therefore they had to wait for him to approve the financial package which would see him become the highest paid manager in their history.
Benitez is based in the North West of England, in the Wirrall - the family home he established during his six-years at Anfield - and the Newcastle job will mean he could still spend some of the week there, which makes the job hugely appealing.
Newcastle have thus far not talked to McClaren in person, only over the phone - but face-to-face talks expected in the next 24-hours, when he is likely to be told he is no longer required.
Newcastle want his successor all but sealed before dispensing with his services, in order to make sure they were not left with a repeat of the John Carver situation, who landed in the manager's job following Alan Pardew's departure purely because he was already on the staff.
Benitez has been out of work since leaving Real Madrid in early January. Should he agree to take on the St James' Park hot-seat, it would be his first role in English football since 2013 - when he was interim boss of Chelsea, leading them to the Europa League title.