The Gunners had a bid rejected for the France international by the Magpies last week and the north London side are yet to submit an improved offer.
Newcastle manager Alan Pardew omitted Cabaye from his match day squad for the club’s opening games against Manchester City and West Ham United.
And director of football Kinnear revealed Newcastle have informed Arsenal of their terms and are waiting for the Gunners to make their next move.
“We’ve told Arsenal our terms,” Kinnear told the Daily Mirror. “The ball is in their court.”
Pardew admitted he is desperate for Cabaye’s future to be resolved following Newcastle’s goalless draw with West Ham on Saturday.
“The situation’s quite simple, really. We need to resolve this and get ourselves in a position where if he stays – great – and if he doesn’t, then we get someone equally as good,” said Pardew.
“That is probably where we’re at, and I don’t really want to say any more than that.”
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