Real Madrid head coach Carlo Ancelotti could be tempted to try and sign Juventus star Paul Pogba.
Tim Sherwood insists all of his current squad are playing for their Tottenham careers.
The Magpies launched an investigation into an incident after the under-21 team's 2-0 defeat at Sunderland on Monday evening.
It was claimed the former Scotland international was involved in an altercation with 19-year-old defender Remie Streete.
A club statement confirming Donachie's resignation made no mention of any such incident and gave no reason for the 62-year-old's decision to leave his post. It said the club would be making no further comment.
Newcastle's loss in the second-string derby came two days after the senior team were beaten 3-0 at home in the Barclays Premier League by the Black Cats.
Donachie's resignation completes a turbulent week at St James' Park.
The Magpies sold their best player, Yohan Cabaye, without replacing him, before that match and earlier this week announced the departure of controversial director of football Joe Kinnear.
Alan Pardew's side are away to Chelsea on Saturday.