The Times of London said Benedict's decree clears the way for the beatification of the late cardinal, who converted from Anglicanism to Roman Catholicism in 1845.
"The holy father's decision is one of great significance for the whole Church. I pray that Newman, by the example of his life and the depth of his teaching, will be received as an authentic guide for Catholics everywhere," said Father Paul Chavasse, whose Provost of the Oratory community was founded by Newman.
If Newman ultimately achieves sainthood status in the Roman Catholic Church, he would be Britain's first non-martyr saint since the Reformation.
Newman would be canonized in the wake of his beatification if the Holy See deems a second miracle traced to the cardinal to be authentic.
Newman has already been credited with helping Catholic deacon Jack Sullivan avoid debilitating back injuries after Sullivan prayed for Newman's intercession.
The Times said the rite of beatification for Newman could take place in Rome or in the British city of Birmingham, where he was buried, or at Westminster Cathedral, the seat of England's Catholics, in London.