The expected move comes one day after coach Ron Rivera told reporters that he had a "slim glimmer" of hope for the playoffs.
Newton is nursing an ailing right shoulder for the Panthers (6-8), who have lost six straight contests and are all but eliminated from playoff contention. They host the Atlanta Falcons (5-9) on Sunday (1 p.m. ET) and reside 1 1/2 games behind the Minnesota Vikings (7-6-1) and one game in back of the Philadelphia Eagles (7-7) and Washington Redskins (7-7) for the second wild-card spot in the NFC.
Panthers general manager Marty Hurney confirmed Wednesday that Newton will be inactive against the Falcons. Backup Taylor Heinicke will start and will be backed up by Kyle Allen.
The 25-year-old Heinicke has completed 2 of 4 passes for 46 yards while making five appearances this season. Three of his career passes have come at the end of either half when the Panthers attempted a Hail Mary.
Newton, who was seen wearing sweats during Wednesday's practice, has thrown for 3,395 yards with a career-best 67.9 completion percentage in 14 games this season. He threw for 24 touchdowns against 13 interceptions for Carolina.
The 2015 NFL Most Valuable Player, Newton recorded season lows in completion percentage (55.2), passing yards per attempt (4.5), passing yards (131) and passer rating (52.5) in Monday's 12-9 setback to the New Orleans Saints.
Newton threw 15 touchdown passes against four interceptions during the first eight games of the season before seeing his numbers take a hit. He has tossed nine touchdown passes and nine picks in his last six contests.
The 29-year-old Newton's continuing shoulder problem was a major part of his post-game session with reporters on Monday.
"Obviously my arm hasn't allowed me to do a lot of practice," he said. "I've been on a pitch count for a long time. It hasn't got worse over the weeks and hasn't got better over the weeks. Nothing changes. Just a lot of soreness and tension in the joint."
Newton led Carolina to the playoffs for the fourth time in five years last season by throwing for 3,302 yards with 22 touchdowns and 16 interceptions. He also rushed for a career-high 754 yards and six scores.