Owen's future has been the subject of intense speculation since the Magpies suffered relegation from the Premier League at the end of last season.
The striker has been linked with several top-flight sides after rejecting reports that he could quit football this summer.
Villa are one club to have been connected with Owen and newspaper stories claimed on Monday they were ready to bring him in.
However, Villa have released a statement on their official website to make it clear that there is no truth in the reports.
"Martin O'Neill has this evening dismissed stories suggesting Villa have offered Michael Owen a two-year contract," read the statement.
O'Neill has lost the services of Gareth Barry to Manchester City and former captain Martin Laursen through his enforced retirement with a knee problem.
But a signing of the quality of Owen - for all his fitness doubts - would lift some of the doom and gloom amongst sections of Villa fans after Barry's departure.
The likes of Tottenham, Everton and Roma are also being linked with Owen.
O'Neill, when asked in January if he would be interested in signing Owen this summer, said: "We would see. Like everything else, football is evolving all the time.
"That's not to say Michael Owen is not a terrific footballer. What happens in the future, I don't know."
One big carrot for Owen, should Villa firm up their interest, would be being reunited with Emile Heskey, with whom he formed a prolific partnership for Liverpool and England.