Panthers general manager Marty Hurney confirmed Wednesday that Newton will be inactive for Sunday's game against the Falcons. Backup Taylor Heinicke will start and will be backed up by Kyle Allen.
Panthers coach Ron Rivera left open the possibility that Newton could play in the season finale at New Orleans if the playoffs are a possibility.
"He'll be on the 53-man all the way through," Rivera said. "Crazy enough things can happen and we'll see from there."
Rivera added: "We had the opportunity to visit with the doctors, the trainers and Cam himself. In talking with Marty and the owner [David Tepper], obviously we felt our best opportunity to win a football game was to have a healthy Taylor to start this week.''
Rivera said the conversation was "good."
"He understood our thinking behind this," Rivera said. "He's disappointed. He's frustrated. He wants to play. We had a great conversation, he understands going forward what we have to do."
Newton has been battling soreness in his right shoulder since throwing 22 passes in the fourth quarter of a comeback victory against Philadelphia on Oct. 21.
Newton arrived at practice Wednesday without a helmet and wearing sweats. Heinicke tookthe first-team snaps.
The decision to shut down the 2015 NFL MVP's season came two days after Newton struggled in Monday night's 12-9 loss to New Orleans, which left the Panthers (6-8) with less than a 1 percent chance of making the playoffs.
Newton completed 16 of 29 pass attempts with no touchdowns and one interception for a season-low 52.5 passer rating against the Saints.
Afterward, Newton expressed frustration over constant stiffness and soreness in his shoulder. He said nothing he has tried, from acupuncture to massage, has worked.
"You can't rub magic dust on it, go to this or that person, have the placebo things done where you think certain things are what they are -- and you come out and you're still the same,'' Newton said at the time. "Over the past couple of weeks, nothing has really changed.''
Three weeks ago, before a loss at Tampa Bay, Newton said he was playing the best football of his career. He proceeded to throw four interceptions against the Buccaneers.
During Carolina's six-game losing streak, Newton has thrown at least one interception in every game.
Despite the soreness in his shoulder, Newton has completed a career-best 67.9 percent of his passes under new offensive coordinator Norv Turner. Newton came into the season with a career completion percentage of 58.5 in seven seasons.
Arm strength has been an issue, though. Newton has completed only nine passes of at least 20 yards this season. That ranks 29th in the league, according to ESPN Stats & Information.
While the league source left open the possibility that Newton could play in the finale against New Orleans, it does not appear likely that will happen. If so, it will be just the second season in which Newton has missed multiple games. He missed two games in 2014 when he was coming off offseason foot surgery.
Heinicke will be making his first NFL start. He has five career pass attempts, including four for the Panthers this season. Three came at the end of either a first half or a game, when the Panthers attempted a Hail Mary.
The news that Newton likely would be shut down for the rest of the season was first reported by NFL Network.
Rivera: Cam disappointed to sit rest of season
Panthers coach Ron Rivera explains the decision to shut down QB Cam Newton for the rest of the season.
Newton shut down for rest of the season
Josina Anderson, Dan Graziano, John Fox and Jac Collinsworth react to the news that the Panthers have shut down Cam Newton for the remainder of the season.