According to Evening Standard, the 18-year-old Germany international is reported to have talked about a deal for more than £150,000 a week to join the Magpies on a free transfer in June.
In 14 Bundesliga games, Moukoko has scored six goals and four assists.
The youngster is also said to be on the wanted list by the likes of Chelsea, Barcelona and PSG.
Newcastle's Saudi-led takeover in 2021 has changed the dynamic in the Premier League and Leicester boss Brendan Rodgers feels the new money in the top flight has made it harder for teams like the Foxes.
"I think I'm a decent coach, but I'm not a magician," said Rodgers.
"If you look at our net spend since I've been here, it's about £10million, in the three-and-half years I've been here.
"Compare that to our competitors, like Aston Villa, West Ham, Newcastle. It's over £250million. It's a big difference.
"If you look at Newcastle's net spend in the last year, along with the fantastic coaching of Eddie (Howe) and his staff plus the infrastructure from where they were to where they are now, they're looking to build and create something.
"They'll do it wisely and sensibly, but they have the resources to do that. So that's the modern game and there's no doubt they join that bracket.
"Look at some of the other teams - Aston Villa's net spend over the last few years, West Ham too. It's becoming a real challenge."