The England u-21 international has signed a six-year contract at the Saint James’ Park but will be unavailable for Newcastle’s Premier League opener against West Ham United on Sunday.
Willock came through the youth ranks at Arsenal before graduating to the first team where he made 40 appearances in the top flight.
The 21-year-old enjoyed a fruitful spell on loan with the Magpies in the second half of the 2020/2021 season, scoring eight goals in 14 Premier League appearances.
"I'm buzzing to be here," Willock told Newcastle's official website. "I loved my time here last season and I'm really happy to be back and to be a Newcastle United player.
"Leaving Arsenal is obviously a big step, and I'd like to thank everyone involved with the club for all their support over the years, but this is the right move to the right club at the right time for me.
"I only got one chance to play in front of a smaller number of Newcastle fans as a home player last season, so I can't wait to step out in front of a packed St. James' Park and experience that atmosphere."
Head coach Steve Bruce added: "I'm absolutely delighted to secure our No 1 target. We have had to be patient and persistent, but it has been worth the wait to bring Joe back."
"Joe is a wonderful young player with all the attributes you want in a midfielder, and he certainly proved that during his time with us last season.
"This is a move I know our supporters really wanted us to make, and I know they will join me in giving Joe a very warm welcome back to St James' Park."
