The 22-year-old has scored three goals in his last two starts for the Citizens, including a brace in the 3-0 victory at Bristol City in the FA Cup fifth round on Tuesday.
Foden is one of five players to keep their place in Pep Guardiola's first XI following the midweek win at Ashton Gate, along with defensive trio Manuel Akanji, Ruben Dias, and Nathan Ake, and playmaker Kevinn De Bruyne.
First-choice shot-stopper Ederson, who is just one clean sheet away from his 100th in the Premier League, has replaced Stefan Ortega between the sticks, while Kyle Walker has been recalled at right-back at the expense of Rico Lewis.
Lynchpin Rodri and captain Ilkay Gundogan will join De Bruyne in centre-midfield, with Kalvin Phillips and Bernardo Silva making way as a result, while Foden is joined in attack by returning duo Erling Braut Haaland and Jack Grealish, with Julian Alvarez and Riyad Mahrez dropping to the substitutes' bench.
Man City have been boosted by the return of defensive pair Aymeric Laporte and John Stones after spells out with illness and a hamstring injury respectively, while Ortega is also fit to make the bench despite sustaining a minor hand issue in the win at Bristol City.
As for Newcastle, Eddie Howe has made three changes from the team that lost the EFL Cup final to Manchester United last Sunday, with Nick Pope returning from suspension to start in goal at the expense of Loris Karius.
Captain Jamaal Lascelles is handed a surprise start at centre-back ahead of Fabian Schar, who is not involved in the matchday squad, while Anthony Gordon replaces Allan Saint-Maximin on the left flank.
Manchester City starting lineup: Ederson, Walker, Akanji, Dias, Ake, Gundogan, Rodri, De Bruyne; Foden, Haaland, Grealish
Subs: Ortega, Phillips, Stones, Laporte, Alvarez, Bernardo Mahrez, Palmer Lewis
Newcastle United starting lineup: Pope; Trippier, Lascelles, Botman, Burn; Longstaff, Guimaraes, Joelinton; Almiron, Wilson, Gordon
Subs: Dubravka, Saint-Maximin, Richie, Targett, Isak, Manquillo, Murphy, Willock, Anderson