Arsenal are now three points ahead of Manchester City in the fight for the league title this season.
For Newcastle, the deal ends Isak’s three-year spell at St James’ Park, where he has scored 62 goals in 109 appearances for the club.
Newcastle said in a statement that no commitment was made by a club official that Isak could leave this summer.
Liverpool initially approached Newcastle last month regarding the striker and have now followed up with an official bid.
Alexander Isak headed home in the 12th minute in Newcastle’s first win in six league games, leaving Arsenal provisionally third in the Premier League table.
The youngster now becomes the first Chelsea player to win the award since its inception in the 2019/20 season.
Meanwhile, Chelsea are also into the fourth round after the Blues pipped Brighton one-nil at Stamford Bridge.
However, one goal in each half for City further added to their woes as they remained fifth on the table and could further drop down if Liverpool win their fixture against Man United on Sunday.
Newcastle United have completed the signing of Alexander Isak from Real Sociedad for a club-record fee reported to be £60 million ($71 million).
