The Cessnock Goannas junior and manager Darryl Mather turned down a two-year extension with the Knights, reported to be worth about $300,000, on Wednesday.
It shocked the Knights, who believed the offer to the 44-game forward was more than fair.
Mather would not comment on speculation on Thursday linking Edwards to the Raiders, but the Herald was told yesterday the 24-year-old had agreed to join Canberra on $50,000 more a year than the Knights had tabled.
It is believed the deal will be for two years.
Mathers and Edwards did not respond to calls from the Herald for comment yesterday.
The Herald reported on July 19 that Edwards was considering an offer to join the Raiders.
It is believed the hard-hitting redhead met Canberra under-20s coach Andrew Dunemann, a former assistant coach at Newcastle under Rick Stone, after the Knights’ 36-6 win over the Raiders at Canberra Stadium last Sunday.
The Herald has been told Parramatta had shown interest in Edwards.
Edwards is reported to have turned down a three-year deal from Newcastle put forward before Christmas worth close to $600,000.
The offer was withdrawn when Knights coach Wayne Bennett put all player negotiations on hold following the team’s poor start to the season.
When talks restarted, Edwards was offered a one-year deal, which was extended to two seasons.
Edwards’s decision on Wednesday was a blow to the Knights and billionaire owner Nathan Tinkler, who vowed when he took over the club last year to do all he could to keep the best home-grown talent in Newcastle.
● Knights winger Kevin Naiqama re-signed yesterday for one year.
Naiqama joined the Knights in 2008 from St George Illawarra.
He played his first NRL game for Newcastle in 2010 and has played five so far this season.