A statement from billionaire Sheikh Khaled’s Bin Zayed Group said: “We can confirm that representatives of His Highness Sheikh Khaled Bin Zayed Al Nahyan are in discussions with Mike Ashley and his team, about the proposed acquisition of Newcastle United Football Club.
“We have agreed terms and are working hard to complete the transaction at the earliest opportunity.”
The statement said Sheikh Khaled considered it “an honour to have the opportunity to build on the strong support, history and tradition of the club”.
Reports at the weekend said Sheikh Khaled, a relative of Manchester City owner Sheikh Mansour, was close to sealing a £350 million takeover.
A spokesman for the club “politely declined” to comment, but sources close to the club have indicated there was interest but many ends still needed to be tied up before a deal could go ahead.
Ashley, the founder of the Sports Direct retail chain, bought the club for £134.4 million in 2007 but has faced a string of protests from supporters disgruntled at what they see as a lack of investment in players.
He has put Newcastle up for sale three times but every bid has failed to produce a deal.