Merino’s deal becomes a long-term one due to a clause triggered in his contract through the amount of Premier League appearances he has made.
And after a hugely positive start in the North East, the Magpies have acted swiftly to pay the £7 million buyout fee.
Merino’s early season performances have so far fastly branded him as Rafael Benítez’s signing of the summer.
United supporters can’t believe what a coup it is to have Merino at St James’ Park.
Since arriving, the 21-year-old has featured in all seven Newcastle’s Premier League fixtures and won the club’s Player of the Month award for August.
Merino has shown all the attributes on what it takes to be a top midfielder in England’s top-flight with his strength, tackling and vision for a pass all catching the eye.
Merino on move
“I’m really happy to be here, and for this part of the contract to finally be official,” Merino told NUFC TV.
He added: "I’m happy to be here for five more years and I hope to keep playing for this club and to give good things to all the people and the club. I’m focused on my displays and improving myself, and I’m really happy to have signed this contract.”
Benitez on permanent deal
Benítez said he is “really pleased we have been able to bring Mikel to the club permanently.”
The Spaniard continued that Merino has "played very well since he joined us" and said: "He has settled in quickly, has a lot of quality on the ball and is keen to learn – that is a crucial part of his future development."
“He has made a great impression,” said the Newcastle manager. The 57-year-old also admitted that “he has confidence” but “he has to keep working hard and playing well, and hopefully he can improve and enjoy playing here.”