The Magpies playmaker has established himself as one of the Premier League’s top talents since his arrival from Lille in 2011, but is thought to be ready to leave St James’ Park in the New Year.
Arsenal saw a £10m approach for his signature over the summer rebuffed, however Arsene Wenger is still thought to be keen on the Frenchman.
But, Liverpool boss Brendan Rodgers is now ready to wade into the battle for Cabaye’s services.
The Northern Irishman is thought to be ready to make major additions to his squad during the next transfer window after witnessing his side make a fine start to the season.
Rodgers is believed to be keen to add to his midfield ranks, with Steven Gerrard and Lucas being relied upon to feature heavily.
He sees Cabaye as the perfect man to inject some creativity into his side, and is hopeful that he can provide Daniel Sturridge and Luis Suarez with the ammunition they need to fire Liverpool to a top four finish.
Newcastle value their man at around £18m, but the Merseysiders are likely to attempt to negotiate a lower fee.
Liverpool fans, would you like to see Yohan Cabaye at Anfield?
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