Shepherd will receive more than £37.6 million for his family's 28 per cent stake, with the sale increasing Ashley's stake in the Magpies to a little under 70 per cent.
"The offer from SJHL is at a level which fully reflects both the performance of Newcastle and its prospects and ambitions for the future,” Shepherd said.
"The board believes that SJHL and Mike Ashley will be excellent custodians of Newcastle United's heritage and will provide the best possible opportunity for the club to flourish in the future, to the benefit of the company and its fans."
Ashley's bid vehicle St James Holdings Ltd (SJHL) said Newcastle United PLC has recommended its 101 pence per share cash offer for the football club.
The billionaire sports retailer is now certain to buy up enough shares from remaining shareholders to reach the 75 per cent ownership mark, which would trigger a full takeover.
Premier League club Newcastle United should soon be in the hands of Mike Ashley after chairman Freddy Shepherd agreed to sell his shares in the club.
