The 20-year-old Academy product initially stepped up to the first team squad after impressing Steve Bruce last summer and he was duly handed his Premier League debut against Manchester United in October 2019.
He ended his breakthrough season with three goals in 15 appearances and won his first cap for England at under-19 level in November 2019.
Despite his contract expiring at the end of the prolonged 2019/20 campaign, the boyhood Newcastle fan has now agreed a new two-year deal.
Longstaff said: "I'm delighted to have signed. It took a bit longer than I'd hoped but I'm really happy it's done now, and I can't wait to get back to playing at a full St. James' Park hopefully soon.
"I spoke to Steve Bruce and we talked through it and it was a no-brainer after I spoke to him. He gave me my chance and I'm really looking forward to working with him and his coaching staff, who were all great with me."
Longstaff's older brother, Sean, also plays for the Magpies and has made 42 appearances for the club.
He added: "Playing alongside Sean always makes it special so hopefully I can get a few more games under my belt with him and crack on."
Head coach Bruce said: "I'm delighted that he's committed himself. It's great to see a young local lad from North Shields staying with his boyhood club.
"It's taken a while, but patience is a virtue and I've always said that I was quietly confident.
"We never want to lose our good young players and it's an important time for Matty now. I do believe the speculation affected him, so let's hope we get to see the real Matty, the one who burst onto the scene before last Christmas, and let's see him come and perform to the level which we hope he can maintain."
Source: Newcastle/website
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