In 2015, the Magpies shelled out £14.5m for the Serbian international but despite becoming a cult hero at St James' Park, he has scored just 13 goals in 59 league appearances.
Last season, he only started 11 matches in the Championship and that has led to manager Rafael Benitez making him available for transfer during the summer window.
According to Foot Mercato, Newcastle have told Lyon that they are willing to sell the 22-year-old should they lodge a bid in the region of £16m.
The Ligue 1 outfit have funds to spend after both Alexandre Lacazette and Corentin Tolisso were sold to Arsenal and Bayern Munich respectively, and Mitrovic could potentially offer value for money due to his age and experience.
Lyon have already added Chelsea attacker Bertrand Traore to their ranks ahead of the new campaign.