A Toon insider told the Sunday Mirror: "Mike Ashley let Steven Taylor know he wanted him to stay and that meant a lot to the player.
"The lack of contract activity over the past year left Taylor feeling he was being forced out of the only club he wanted to play for.
"Things are now moving towards a satisfactory conclusion on a three-year deal and it looks likely that Taylor will sign a new contract when he returns from holiday.
"It makes a lot of sense for the club to secure the future of a player who is on the fringe of the England team. In six months' time he could have agreed a deal to move on and Newcastle wouldn't have got a penny.
Taylor, who made a full England squad last season, was earning less than £10,000 a week. But the new offer will give him parity with fellow young players such as Charles N'Zogbia and James Milner, who both earn about £30,000 a week.