Aston Villa and Stoke City are also in for the Uruguay international, who hit 15 goals in Ligue 1 last season.
Bordeaux president Jean-Louis Triaud revealed Newcastle are ahead of their Premier League rivals and he said: "There has been contact with Newcastle through intermediaries, so there is interest from them. At this stage, we are yet to hear from Aston Villa."
Newcastle are set to take their summer spending to £35m by announcing a £7.5m move for 20-year-old Anderlecht defender Chancel Mbemba, who will join on a five-year deal worth £30,000-a-week.
Steve McClaren insists he still has money to spend after the arrivals of Georginio Wijnaldum and Aleksandar Mitrovic, and the head coach said: "We're working hard behind the scenes on a number of deals."