The 22-year-old has signed for Aston Villa after handing in a transfer request earlier this month at St James' Park.

Martin O'Neill is a long-standing admirer of the Leeds-born wideman and had a bid of £8m rejected a couple of weeks ago with the Newcastle board understood to be holding out for around £10m.

Milner left Elland Road in 2004 following Leeds's relegation in a deal worth an initial £3.5m that included an additional sell-on clause.

A similar clause inserted in the transfer that took Aaron Lennon to Tottenham Hotspur the following summer has since been bought out by the north London club, the money being used to help strengthen the squad a year later when Ian Westlake and Kevin Nicholls were signed for a combined fee of around £1m.

But in Milner's case, the Yorkshire Post has discovered that the clause still exists – leaving United in line for a welcome cash bonanza after Newcastle received £10m for the player.

Leeds chairman Ken Bates has admitted the club could soon receive a windfall, though he declined to name either the club or player involved.

He said: "We have a sell-on clause on a player in demand at another club. We were approached to take a figure to buy out the rights, which suggests he may be about to move on. We are happy to ride with it, see what happens and take our share."

Milner, who became the youngest scorer in the Premier League when with Leeds, made almost 100 appearances for Newcastle and also spent the 2005-06 season on loan at Villa Park.

Meanwhile, veteran defender Paul Telfer has signed a one-year deal after impressing on his debut in Tuesday night's Carling Cup victory over Crystal Palace.

The 36-year-old had been signed on a non-contact basis by Gary McAllister during the summer after leaving Bournemouth earlier in the year.