General manager Dave Gettleman said last month at the NFL owners meeting that picking up Newton's option was the plan.
Carolina had until May 3 to inform Newton and his representation that it would use the fifth-year option that was built into the new collective bargaining agreement.
Under the CBA, Newton will be entitled to the average of the league's 10 highest paid quarterbacks in 2015. That estimate comes out at $14.67 million. The Panthers likely won't get to the fifth year of Newton's contract as they remain set on signing him to a long-term deal.
Newton underwent surgery on his left ankle last month. The rehabilitation likely will take him up to the start of training camp in late July.
Newton said on Tuesday that he is on a rapid pace to come back. He plans to be around the team as much as possible during offseason workouts, which began on Monday, while commuting to Auburn where he is taking classes toward graduation.
Newton said on Tuesday he was not concerned about his contract, that his focus was on helping Carolina put together consecutive winning seasons for the first time in team history.
"My job is to execute and be the best player I can be for the Carolina Panthers organization, for the Carolina Panthers community, and to represent my name and my team the best I can," Newton said. "I'm trying to get back to the playoffs."
The fifth-year option buys a Carolina team currently strapped under the salary cap time to get that new deal done without risk of Newton becoming a free agent after next season.
"This is the first time this has all happened," Gettleman said at the owner's meeting. "As you plan, as you think about it, as you make decisions, the thing you have to remember is I know that every decision I make there's a message being sent to the locker room. And that's impactful."
Information from ESPN NFL Insider Adam Caplan was used in this report.