Butt only signed a new one-year deal in January, but much has changed since then.
The midfielder is out of the season opener at West Bromwich Albion, having had an operation on a partially dislocated thumb last month.
However, Hughton and would-be manager Alan Shearer had pencilled him for a major role this season, with Butt the favourite to be handed the skipper's armband in the wake of Michael Owen's summer departure.
The Chronicle reports he will move on before the transfer window closes.