A panel of theological consultors agreed unanimously that the inexplicable healing of an American man who was "bent double" by a severe spinal disorder came as a result of praying to Newman for a miracle, according to sources.
Their decision was the final hurdle before Pope Benedict XVI can declare him "Blessed".
The Pope, who is known to be keen to make Newman a saint and who asks about the progress of his cause on a regular basis, was informed of the panel's decision straight away.
The vote means that the Pope can now beatify Newman at a date of his choosing. A second miracle will be required before Newman can be declared a saint.
The move was welcomed by Oxford University theologian Father Ian Ker, the author of the definitive biography of Cardinal Newman.
Father Ker said: "Newman was definitely a saint and he was a very English saint. He had a great sense of humour like St Thomas More.
"He also had a great gift for friendship which has been lost in the modern age." The priest said Newman was a significant figure to Catholics worldwide because he pre-empted the reforms of the Second Vatican Council of the 1960s that modernised the Church.
Father Ker added: "As soon as he is canonised he will definitely be made a theological "doctor of the Church" and he will be seen as a doctor of this period we are living in.
"He would thoroughly agree with Pope John Paul II's and Benedict's understanding of the reforms of the council. While Newman was open to new ideas he was extremely loyal to the authority and the tradition of the Church."
A formal announcement by the Vatican on Newman's beatification is expected within the next two months.
He could be beatified as early as the autumn but it is more likely to go ahead next year.
When Gordon Brown visited the Vatican in February he invited Pope Benedict to Britain to perform the ceremony in person, possibly at Wembley Stadium.
But there have also been suggestions that the beatification should take place in St Peter's Square, Rome, because of Newman's international significance as a modern theologian.
The breakthrough concludes the work of the theological consultors who spent six months examining doctrinal issues surrounding the healing of Jack Sullivan, 69, a deacon from Marshfield, Massachusetts.
A panel of medical experts had earlier concluded there was no scientific explanation for the healing.
All that remains for the beatification to go ahead is the miracle to be rubber-stamped by the cardinals of the Vatican's Congregation for the Causes of Sainthood and the Pope's signature.
Benedict XVI has been an admirer of the writings of Cardinal Newman since the 1940s, especially his "theology of conscience".
He learned about this from a German scholar called Theodor Haecker, who translated Newman's works from English into German, and who was close to the White Rose, a German resistance movement in the Second World War.
It was revealed last month that German academics have discovered that Newman's writings on conscience were a key inspiration of the White Rose – in particular of Sophie Scholl, a student beheaded in 1943 at the age of 21 for distributing leaflets urging students at Munich University to rise up against "Nazi terror".
Newman was born in the City of London in 1801. He became a Church of England vicar and led the "Oxford movement" in the 1830s to draw Anglicans to their Catholic roots.
He converted to the Catholic faith at the age of 44 after a succession of clashes with Anglican bishops made him a virtual outcast from the Church of England.
He continually clashed with both Anglicans angry about his conversion and Catholics who suspected him of being "half-Protestant" but his brilliant mind combined with his care for the poor won him his cardinal's red hat from Pope Leo XIII in 1879.
He died in his room at Oratory House, Birmingham, at the age of 89 years and more than 15,000 lined the streets for his funeral a week later. His cause for sainthood was opened in 1958.
Last October undertakers attempted to exhume his body from a grave in Rednal, Worcestershire, but found that it had completely decomposed.
If Newman's cause progresses swiftly he could become the first English saint since 1970 when Pope Paul VI canonised 40 martyrs of the Protestant Reformation.
The last British saint was St John Ogilvie, a Scottish Jesuit martyr, canonised by Pope Paul VI in 1976.
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