'Sky Sports' reports that Newcastle will have the option to sign the player on a permanent deal next summer.
The player joined Dortmund last summer from Osasuna but managed just two starts all season for the German side.
The versatile Spanish U21 international is equally at home in midfield or defence and will no doubt welcome the possibility of first team football.
Should everything go smoothly on the medical front, the 21-year-old will become Newcastle's fifth signing of the summer, following the arrivals of Christian Atsu, Florian Lejeune, Jacob Murphy and Javi Manquillo.