The striker left Shakhtar Donetsk due to concerns at the ongoing unrest in Ukraine and now has the option to complete a permanent switch after rejecting interest from West Ham
The St James's Park outfit will pay a €2 million loan fee with the option of making the deal permanent for a further €8m.
Goal also reported that Ferreyra spoke to fellow Argentine Fabricio Coloccini regarding the move, with the striker confirming that the Newcastle skipper convinced him to join the Magpies.
"I am very pleased to sign for Newcastle United," he told the club's official website. "I like the Premier League and when I knew that Newcastle were interested in me, it was a very easy decision to make.
"I spoke to my friend Fabricio Coloccini, and when he told me about the club, I didn't need to think twice."
Newcastle United manager Alan Pardew said: "Facundo is someone we know on a number of levels, including his friendship with Fabricio, and we think he could be a big success here at Newcastle.
"This is a player who has played at the top level and is highly regarded in Argentina. He has tremendous potential and hopefully he can realise that here at Newcastle United."
The club have beaten off competition from a host of European clubs including a number from the Premier League - with West Ham amongst those eager to land him.
The 23-year-old moved to Shakhtar last summer but is one of several of the club's star players to have grown increasingly concerned at the ongoing violent unrest in eastern Ukraine.