The 51-year-old has been handed the extension along with three members of his coaching staff John Carver, Steve Stone and Andy Woodman.
Pardew guided the Magpies to a fifth placed finish in the Premier League last season helping them qualify for the Europa League.
Newcastle chairman Mike Ashley has decided to reward the former Charlton boss and his coaches for the team's performance last season and to bring long-term stability to the club.
Managing Director Derek Llambias hailed Pardew and is looking to emulate the success of Manchester United and Arsenal who have shown that keeping faith with the manager is a productive formula for building a winning team.
|PREMIER LEAGUE LATEST
|10/1||Newcastle are 10/1 with Paddy Power to beat Reading 2-0 this weekend
"We're looking to build on the success we had last season and these new contracts are aimed at keeping the Club progressing on and off the pitch, as we have done since returning to the Premier League in 2010.
"Alan has done a fantastic job over the last couple of years and has proved what a great Premier League manager he is. I have total respect for him in all football matters and have an excellent relationship with him which I think benefits the club enormously.
"Alan also has one of the best backroom teams in the country and I would like to thank John Carver, Steve Stone, and Andy Woodman for all their combined efforts.
"We hope this announcement will be great news for the fans, whose support and commitment to this club over the years has been fantastic."