Allardyce, who stepped down from his position as Bolton boss on April 29, is favourite to succeed Glenn Roeder, who resigned after last Saturday's 2-0 home defeat by Blackburn.

"It was a good meeting and my agent will speak to Newcastle again over the next few days to discuss matters further," Allardyce told The Sun.

Shepherd added: "Sam's excited and we're looking forward to making this work."

Allardyce, who turned down the chance to manage the Magpies three years ago, met Shepherd for lunch at London Claridge's hotel on Friday to discuss the proposed deal.

Last summer he was interviewed for the England job but lost out to Middlesbrough boss Steve McClaren.