The new Newcastle owners contacted Fonseca in the summer and talks have been revived between the two following the departure of Steve Bruce.
It has been claimed that the Magpies have been in negotiations with the Portuguese, who has been mooted to be a leading contender for the manager’s post.
Newcastle have other names on their shortlist as well but the former Roma boss has emerged as the contender to become the next manager at St. James’ Park.
And according to Italian journalist Nicolo Schira, Fonseca is eyeing a three-year contract before he can agree to be the next Newcastle boss.
The 48-year-old wants stability and a project to build upon at Newcastle over the next few years.
But it is unclear what profile of manager Newcastle want at the moment as there are suggestions they could look to bring in someone for the short-term who could help them to survive in the Premier League this season.
However, Fonseca seems to be demanding a long-term project in negotiations with the Magpies.
The former Roma boss almost became the Tottenham manager in the summer before Daniel Levy had a chance of heart and appointed Nuno Espirito Santo.