The former Leeds United forward has fallen down the pecking order under Sir Alex Ferguson and is keen to secure first-team football.
Middlesbrough were thought to be leading the chase for the England international, but The Magpies have now moved to the head of the queue.
Sam Allardyce is keen to strengthen his squad and is set to boost his transfer kitty after agreeing a fee with West Ham for pacey midfielder Kieron Dyer.
"I am hoping that the Alan Smith deal will go through on Thursday," Allardyce told the Evening Chronicle.
"He has other clubs to consider and I am hoping we are top of his list."
Smith made just nine Premier League appearances for The Red Devils last term after recovering from the broken leg suffered against Liverpool.
A move to St James' Park could see Smith renew his partnership with Mark Viduka, whom he played alongside during their days at Elland Road.
Newcastle United have completed the signing of Czech Republic international defender David Rozehnal from Paris St Germain for a fee of £2.9m.
The 26-year-old has signed a four-year contract at St James' Park after agreeing terms with boss Sam Allardyce.
Rozehnal becomes Newcastle's third signing of the summer, after midfielder Joey Barton and striker Mark Viduka.
Rozehnal, who has won 34 caps for the Czechs, could cost another £200,000 depending on appearances.
Rozehnal began his career in his home country with Sigma Olomouc and twice won the Belgian title with Bruges before his move to PSG in 2005.
Newcastle boss Sam Allardyce is keen to bring in central defenders after releasing Titus Bramble, Craig Moore, Oguchi Onyewu as well as left-back Olivier Bernard.
The Magpies boss also revealed on Thursday he was hopeful of signing Cameroon midfielder Geremi from Chelsea.
Viduka's record:
Years Club App (Gls)*
1993-1995 Melbourne Knights 048 (40)
1995-1998 Croatia Zagreb 082 (40)
1998-2000 Celtic 037 (30)
2000-2004 Leeds United 130 (59)
2004-2007 Middlesbrough 103 (43)
2007- Newcastle United
He will be a perfect foil for strikers Michael Owen and Obafemi Martins and will guarantee goals as his record above shows.
Sam Allardyce is also close to sealing the move for Joey Barton from Manchester City and has also voiced his interest in central defender Tal Ben Haim , who is out of contract with Allardyces' previous club Bolton Wanderers.
Ben Haim may be swayed to play for his former boss - the bonus for Toon is he available on free transfer!!!
Get in there Sam!
