Alan Pardew will be appointed the new Crystal Palace manager after the club agreed a compensation package with Newcastle.

Pardew will sign a four-year contract, worth in the region of £2million-per-season, after agreeing to return to the club he joined as a player in 1987.

The two clubs settled on a fee to free Pardew from his Newcastle contract, which still had six years left to run. The original release figure was set at £5million, but with Palace unwilling to the meet that price, a lower fee was agreed. A figure of £2m has been quoted, but Newcastle insist the fee was higher. Pardew had made it clear to Newcastle owner Mike Ashley, who is in Barbados, that he wanted to return to Palace and the Toon chief agreed to compromise.

VIDEO Scroll down to watch Alan Pardew singing his heart out as a Crystal Palace player

Alan Pardew is set to be appointed as the new Crystal Palace manager

Pardew applauds the home crowd after Newcastle's 3-2 win against Everton at St James' Park

Newcastle owner Mike Ashley, who is currently in Barbados, will have the final say on Pardew's future

The Newcastle fans wanted Pardew out after a difficult start to the 2014-15 Premier League campaign

Newcastle supporters hold up a 'Pardew is a muppet' banner ahead of their team's Premier League clash against Stoke in April

Pardew played more than 100 games for Palace during a four-year spell at the south London club

PARDEW AT PALACE Pardew made 128 league appearances between 1987 and 1991, scoring eight goals. The highlight of his time at Selhurst Park, however, was the FA Cup run in the 1989-90 season. Pardew was one of the 'Fab Four' (with Mark Bright, Gary O'Reilly and Andy Gray) and scored the winner against Liverpool in that memorable 4-3 semi-final victory at Villa Park (the other three also netted in that match). The Eagles pushed Manchester United all the way in the Wembley final, drawing 3-3 in the first match, but lost 1-0 in the replay. Pardew played every minute of both matches. Advertisement

Those linked with the Newcastle job included club captain Fabricio Coloccini, former Stoke and Palace boss Tony Pulis, Derby’s Steve McClaren and Eddie Howe of Bournemouth.

Pardew ducked the post match press conference after Newcastle's dramatic 3-2 victory against Everton on Sunday and has agreed to move to Selhurst Park once the clubs reached a deal.

The 53-year-old boss has faced various campaigns calling for his resignation or dismissal by sections of Newcastle supporters throughout his turbulent reign at the club.

Ashley, who did not attend the victory over Everton on Sunday, has been plotting his next move from his holiday retreat.

The billionaire is wary of the upheaval when his manager quits the club and will also need to find a replacement prepared to work under his demanding ways.

Pardew, who has a property in Surrey a short distance from Palace’s Beckenham HQ, is known to be frustrated after being told at a Newcastle transfer meeting four weeks ago that there would be no money to spend in January.

Instead there is the possibility that Moussa Sissoko will leave in January after Arsenal and Paris Saint-Germain declared an interest in the France midfielder.

Ashley has agreed to reach a compromise with Eagles chief Steve Parish rather than demand the full £5m

Moussa Sissoko could leave in January after Arsenal and Paris Saint-Germain declared an interest

Pardew played a prominent role in Palace's recording of Glad All Over in the build up to the 1990 FA Cup final

WHEN COULD PARDEW BE FACING HIS FORMER CLUB? Crystal Palace vs Newcastle - Wednesday February 11, 8pm Advertisement

Newcastle are ninth in the Barclays Premier League following the victory over Everton and Ashley is happy with the team’s progress following their poor start to the season.

Pardew, who wanted to progress and challenge for honours, expected Ashley to make funds available to strengthen the team.

Instead the Newcastle owner, who had an excellent relationship with his manager, appears content with the current squad.

Pardew, who joined Palace in the Eighties and went on to score the winner in the FA Cup semi-final against Liverpool in 1990, is currently at his family home in Surrey.

NEWCASTLE STATEMENT 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 (Monday), 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. Advertisement

Pardew (No 11) scores the winning goal for Crystal Palace in the 1990 FA Cup semi-final against Liverpool

Crystal Palace are stepping up their search to replace former boss Neil Warnock