Newton's deal at St James' Park expires this summer and both parties have decided for a parting of the ways.
The 22-year-old has spent the last 18 months on loan at St Mirren and Newton impressed during his time at the club, helping the club win the Scottish League Cup last season when he scored in the final victory over Hearts.
Newton's performances at St Mirren have not gone unnoticed, with several Championship and other Scottish clubs keeping tabs on his situation as the player is an attractive proposition being available on a free transfer.
Newcastle-born Newton, who this season played the most minutes of any outfield player in the Scottish Premiership, admitted it was a tough decision to leave St James' Park, but is determined to continue playing regularly after getting a taste of first-team action at St Mirren.
"I have decided to move on from Newcastle when my contract expires," Newton told Sky Sports. "I have played 60 games for St Mirren and I have got to continue playing now on a regular basis.
"I am thankful to Newcastle for letting me leave on a free and I am grateful to Alan Pardew and all the coaching staff at Newcastle.
"I am from Newcastle and I will always be a Newcastle fan, but I just feel I need to leave so that I can continue my own career.
"I have really enjoyed my time at St Mirren and I would like to thank Danny Lennon, Tommy Craig and everyone at the club for making me so welcome and giving me the chance to play.
"I will never forget scoring in the League Cup final and the fans were great to me."
Newton is keeping his options open as he waits to see what offers come his way this summer.
"I am looking forward to the challenge of playing for a new club next season," added Newton.
"I am keeping my options open and I will sit down with my agent and discuss what offers come my way."