Nottingham Forest have a contractual obligation to make Chris Wood's move to the City Ground a permanent deal at the end of his season long loan.
In a deal packed with incentives for Wood he can earn himself an extra year of contract with the Trees.
Newcastle United are expected to bank £15million from the sale and the striker - who arrived from Burnley last January - will make a significant cost saving on the wage bill with the player one of the highest earners at St James' Park.
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A Forest statement read: "The striker joins on loan for the remainder of the season with a conditional obligation to become a permanent deal until the summer of 2024."
Sporting Director Filippo Giraldi added: “Chris is a player who has great character and experience, having played 189 games and scored 54 goals in the Premier League. He is hungry to join us, and we are proud and ready to fight together to reach our targets."
Wood had 18 months left on his contract at Newcastle and while the player wanted to see the deal out, there was no guarantee of a contract until 2024 - which Forest have pushed his way.
The Magpies have already started their search for a replacement.
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