The Magpies are understood to need to shave £125,000 off their wage bill and still have Colback, Sterry, Rolando Aarons, Achraf Lazaar and Henri Saivet on their books despite none of the quintet being eligible to play in the English Premier League this season after failing to make manager Steve Bruce's final squad.
Sterry, a 23-year-old right-back, has made just 12 appearances for Toon in four seasons, and has had loan spells with Coventry and Crewe Alexandra.
Former Sunderland youngster Colback has played more than 102 games in black and white but his last outing came during the 2016/17 season in the Championship.
He has spent the last season-and-a-half on loan at Nottingham Forest.
The pair both featured for the St James' Park side during pre-season, but failed to make the final squad list for league matches.
The Chronicle reports that both players have had interest from Scottish clubs, but are "yet to strike a deal" as Newcastle's loan manager Shola Ameobi attempts to find clubs for the out-of-favour players.
English Premier League players can still sign for League One and League Two sides on loan, while European clubs are able to make permanent signings.
Speaking last week, Bruce said: "We brought in two players late on - if we hadn't have done that, then Jack was probably going to be in.
"We did explain it to him but it's difficult. Hopefully, he goes out on loan. There have been one or two little sniffs."