The 57-year-old has resigned as manager, bringing to an end huge confusion surrounding his future at the club.
The former England boss was locked in talks with Newcastle's board on Monday and Tuesday, and reports of him being sacked began to leak out of St James' Park.
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Kevin Keegan managerial timelineBut, United denied he had been sacked and then Keegan insisted through the League Managers Association that he had not resigned.
However, following further talks, Keegan has quit his role - bringing to an end his second spell in charge, after taking over from Sam Allardyce.
In a statement released through the LMA, Keegan confirmed he had quit - citing the fact he did not have the control he wanted over club affairs.
"I've been working desperately hard to find a way forward with the directors, but sadly that has not proved possible," he said.
"It's my opinion that a manager must have the right to manage and that clubs should not impose upon any manager any player that he does not want.
"It remains my fervent wish to see Newcastle United do well in the future and I feel incredibly sorry for the players, staff and most importantly the supporters.
"I have been left with no choice other than to leave."
The LMA confirmed that Keegan failed to resolve his issues after talks over the past few days.
"The board of directors of Newcastle United Football Club and Kevin Keegan have been in detailed discussions," said an LMA statement.
"The letter which Kevin received today from managing director Derek Llambias has failed to resolve the matters in issue between him and the club and accordingly he feels he has no alternative other than to resign."
LMA chief executive, Richard Bevan, added: "The LMA has been supporting Kevin during a very difficult period.
"We share his great disappointment and frustration that the situation could not be resolved."
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