The Magpies confirmed late on Monday evening that the Eagles had made a formal approach for the 53-year-old, who has been in charge at St James' Park since December 2010, as they look for a replacement for Neil Warnock.
A statement read: "Newcastle United can confirm that Crystal Palace have made a formal approach requesting permission to speak to Alan Pardew in relation to their vacant managerial position. Crystal Palace have offered compensation at a level whereby Alan has now been permitted to speak to them.
"As a result of this development today, Alan will not be at training on Tuesday. Training will be the responsibility of assistant manager John Carver. The club will make a further announcement in due course."
Bookmakers suspended betting on Pardew's appointment at Selhurst Park on Sunday as speculation mounted that he was heading back to the club he played for.
The man himself further fuelled the rumours when he failed to conduct media interviews after his team's 3-2 Barclays Premier League victory over Everton, asking assistant Carver to speak to journalists instead.
Mike Ashley, who was on the verge of sacking Pardew a couple of months ago, now wants compensation understood to be in excess of £2million.
Not a bad bit of dealing.
He was controversially parachuted in at St James' Park, much to the dismay of many fans, as Chris Hughton's replacement.
Hughton, of course, had dragged the club back out of the Championship at the first attempt after stepping into the maelstrom caused by relegation at the end of the 2008-09 campaign when even the efforts of Tyneside hero Alan Shearer could not spare them from the drop.
From the off, Pardew was viewed simply as another member of owner Mike Ashley's so-called Cockney Mafia.
Ashley now faces the task of recruiting the seventh permanent manager of his seven and a half-year tenure and his sixth appointee with Ajax boss Frank de Boer, Hull's Steve Bruce and former Palace manager Tony Pulis among the bookies' favourites, with skipper Fabricio Coloccini being quoted as a left-field candidate.