United have agreed a Stg£9 million fee with Newcastle for England international centre-back Jonathan Woodgate.
Leeds' dire financial situation has forced them into selling Woodgate, who will tonight be meeting with Newcastle officials to discuss personal terms, and striker Robbie Fowler who has joined Manchester City for £3 million, with a further £3 million dependent on first-team appearances.
It is the Woodgate deal, however, which now throws into doubt the future of manager Terry Venables, who last week stated he would consider his options should the 23-year-old be sold.
It is known Venables met with Ridsdale this afternoon at the club's Thorp Arch training complex to discuss the situation, and, at the moment, he remains in charge at Elland Road
Following Leeds' 3-2 defeat against Chelsea on Tuesday, Venables suggested Fowler's departure would ensure Woodgate would remain at Elland Road.
But the club's staggering debts and exorbitant wage bill have clearly dictated otherwise.
Woodgate's potential switch to his native north-east will have far-reaching repercussions for the club, not least because it could mean they may have to start a search for a new manager.
Venables only took charge in early July, but has had to stand by and watch as Rio Ferdinand, Robbie Keane, Lee Bowyer, Olivier Dacourt and Fowler have all left, with Woodgate's departure possibly the final straw.
When Venables accepted the post in the summer, in the wake of David O'Leary's sacking, he was told he initially had to raise just £10million through player sales, but within two weeks - and against his wishes - Ferdinand was allowed to join Manchester United for £29.1million.
Keane followed soon after before the release of Bowyer and then Dacourt once the transfer window opened at the start of this month during which Leeds have also sold their travel company, while they are looking into selling parts of their Thorp Arch training complex in a bid to raise further funds.
Debts stood at £77million at the end of July, yet clearly remain unmanageable despite the significant swathe the plc board - run by chairman Peter Ridsdale, deputy chairman Allan Leighton, financial director Stephen Harrison, Neil Holloway and David Spencer - have cut through the squad.
The problems have arisen as Leeds banked on the riches of Champions League football following their success in reaching the semi finals of the competition in 2001, only to fail in the two subsequent seasons.
Understandably, the supporters are furious, with many having already threatened to either hand back their season tickets, or burn them, in protest.
A large white banner held up at the Priestfield Stadium on Saturday ahead of the FA Cup fourth-round clash with Gillingham read: 'Peter why are u selling our soul?'
Such is the feeling of antipathy from the fans now, one today placed a 'For Sale' sign round the esteemed Billy Bremner statue at Elland Road before it was hastily removed.
Further demonstrations are now certain to follow on Tuesday when the replay with Gillingham takes place, which could make for an uncomfortable evening for Ridsdale and his plc colleagues.