Pardew, who counts West Ham United and Charlton Athletic among his former clubs, joined Newcastle in 2010 and has led them to 12th and fifth place Premier League finishes.
The club have also handed long-term deals to assistant manager John Carver, coach Steve Stone and goalkeeping coach Andy Woodman.
The effort to impose stability at the club is in contrast to their recent history where they have had nine permanent or caretaker managers in the last eight years.
"If you look at clubs like Manchester United and Arsenal, Alex Ferguson and Arsene Wenger have shown that stability gives you the best platform to achieve success, and that is the model we wish to emulate here," managing director Derek Llambias said on the club website.
"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."
Pardew's appointment was initially unpopular with fans who were disappointed former boss Chris Hughton was sacked after he led the club back to the Premier League.
He has since won them over with some fine performances on the pitch as well as some astute signings that helped him win both the Premier League manager of the season award and the League Managers' Association manager of the year award.
