Taylor, who was born in Greenwich but brought up on Tyneside, has never made any secret of his desire to stay with the club he supported as a boy.
However, his existing deal, which is due to expire at the end of next season, made him one of the lowest earners among the first-team regulars.
His agent Leon Angel has been trashing out new terms with vice-president (player recruitment) Tony Jimenez in recent weeks in London with the latter in close contact with Llambias up at St James' Park.
Taylor put forward the case he was interesting clubs like Liverpool and Arsenal, and asked for £60,000 per week, which owner Mike Ashley flattly refused.
It is understood the new deal would put Taylor on a par with fellow youngsters James Milner and Charles N'Zogbia, who signed improved contracts under the previous regime.