Earlier this summer, the 18-year-old looked set to sign a new six-year contract with the West Londoners before moving to Crystal Palace on loan.
However, Newcastle have stepped up their interest in Hall over the last week and now appear have hijacked Palace's proposed deal to recruit the versatile wideman.
According to Sky Sports News, the Magpies have agreed to sign Hall from Chelsea on an initial season-long loan deal with an obligation to buy next summer.
Newcastle are understood to have agreed to pay Chelsea £28m plus £7m in performance-related bonuses to bring Hall to St James' Park.
Hall is said to be travelling to the North East to undergo his medical today (Friday) and finalise his move to the Magpies.
Newcastle manager Eddie Howe confirmed the club's interested in signing Hall initially on loan during a pre-match press conference on Friday.
"Yes, I think it is [a loan]. Let's wait and see what happens today," Howe told reporters. "He's a player that I like, very versatile, really good potential."
Howe has also revealed that the expected arrival of Hall is set to conclude the club's transfer business this summer unless members of his squad were to pick up injuries late in the window.
"I think if we were able to bring a player in, that would be our transfer business concluded unless there were injuries within our own players," Howe added.
Newcastle have opted to recruit Hall on an initial loan deal to comply with Financial Fair Play regulations having already spent over £125m this summer on quartet Sandro Tonali, Harvey Barnes, Valentino Livramento and Yankuba Minteh, the latter of whom has joined Feyenoord on loan.
Hall, who is a lifelong Newcastle supporter, joined Chelsea's academy at the age of eight back in 2012 before making his professional debut for the Blues in January 2022 under former head coach Graham Potter.
Chelsea ended the 2022-23 campaign trophyless and slumped to a 12th-place finish in the Premier League, but Hall enjoyed a impressive breakthrough season with the Blues and was named their Academy Player of the Year.
Hall made a total of 11 first-team appearances for Chelsea in all competitions last season, including eight Premier League starts, and he primality operated as either a left-back or left wing-back.
The England Under-21 international, who can also play as a left winger, has been targeted by Newcastle after they allowed Jamal Lewis to join Watford on loan earlier this summer.
Hall is expected to battle with Dan Burn and Matt Targett for regular starts at left-back for Newcastle, who will soon be juggling domestic duties with Champions League football.
Hall is seemingly unlikely to be confirmed as a Newcastle player in time for Saturday evening's Premier League trip to the Etihad Stadium to face reigning champions Manchester City.