Milner only signed a new five-year contract at Elland Road last year and was due to renegotiate his salary next week.
However, it was clear to him that Leeds needed the money his move would generate so he agreed to talk to Newcastle after the clubs decided a fee.
But selling Milner is a massive step backwards for Leeds, according to an Elland Road supporters group.
Simon Jose, of the Leeds United Independent Fans' Association, was angered by the sale, believing it has severely hampered their chances of a quick return to the Premiership.
Jose also expressed his disappointment at the leadership shown by chairman Gerald Krasner and directors Melvin Helme, Simon Morris and David Richmond since the takeover of the club in March. Jose said: "I just feel that we are back to square one, where the only way to raise money is by selling players. Selling Jonathan Woodgate wasn't the answer and now we've come full circle. We had one Peter Ridsdale and now it feels like we have got four. "I don't think we could build a team around James Milner but we have got to find a way to get back into the Premiership and the way is to hold on to your players. But it's not done for footballing reasons and this is why the people who run football clubs shouldn't be in charge. "They should structure the club so this doesn't happen. Selling players is like a get out clause and it sticks in the throat of the people of Leeds. "Five million pounds might seem like a lot of money in the short term but relegation cost us £20m. In the long term, for a talented striker, it is financial suicide. "Milner wanted to stay but the board took £5m. All they care about is making their and wallets fatter."Leeds director Peter Lorimer was quick to assure fans that at least some of the money received for Milner would be used to buy new players. He told Sky Sports News: "We are as disappointed as the fans are to lose a player like James Milner. Some of the money will be directed towards team rebuilding. The money will be put to good use, our fans can be sure of that."Milner's representative, Professional Footballers Association deputy chief executive Mick McGuire, told the Press Association: "There has never been a more committed player to Leeds United than James and he will always be a huge fan of the club.
"He signed a five-year deal last year, he bought a house in the area and his mum and dad have already renewed their season tickets for the coming season.
"However, it is common knowledge that, as part of Leeds' survival plans, they need to generate income from transfers, so we appreciate their dilemma and understand their decision to let James go because the money this raises helps safeguard the future of the club.
"However, things have moved on since then and once Leeds agreed a fee with Newcastle and gave him permission to speak to Sir Bobby Robson, he felt that it was only fair and proper to talk to a club of that magnitude.
"James is excited about joining one of the premier clubs, who can offer him a major stage and European football.
"However, he leaves with a heavy heart and is glad that the money his move has generated will help Leeds in the longer term."
Milner even forfeited some of his financial entitlements from Leeds in a bid to further help the club.
McGuire again dismissed stories that Milner had already been offered a 100% pay increase to stay at Leeds.
He added: "It is important that I again stress that no discussions took place about a new contract for James, and I was surprised to read quotes from some very responsible people claiming they had offered to double his money.
"The reality is that talks were put on hold until Dave Richmond returned from holiday next week."
Milner is one of the brightest young talents in English football. He is the second-youngest player to play in the Premiership behind Coventry's Gary McSheffrey, and at 16 and 309 days, is the second-youngest ever player behind Leeds legend Peter Lorimer to have played senior football for the club.
The Horsforth teenager broke Wayne Rooney's record as the youngest-ever Premiership scorer by four days, aged just aged 16 and 357 days when he secured a win for United at Sunderland's Stadium of Light in December 2002.