Howe had been out of work since stepping down as Bournemouth manager in August 2020 after they were relegated from the Premier League.
The 43-year-old will come in as a replacement for Steve Bruce, who parted company with the Magpies after Saudi Arabia's Public Investment Fund took over the club last month.
Newcastle's search for a new man has been long and tumultuous especially after Villarreal boss Unai Emery publically rejected their approach.
"It is a great honour to become head coach of a club with the stature and history of Newcastle United," said Howe, who will take training at the club for the first time on Tuesday.
"It is a very proud day for me and my family.
"This is a wonderful opportunity, but there is also a lot of work ahead of us and I am eager to get onto the training ground to start working with the players.
"I would like to thank the club's owners for this opportunity and thank the club's supporters for the incredible welcome they have already given me. I am very excited to begin our journey together."
Newcastle United co-owner Amanda Staveley said: "We have been incredibly impressed by Eddie through what has been a rigorous recruitment process.
"As well as his obvious achievements with AFC Bournemouth, where he had a transformational impact, he is a passionate and dynamic coach who has clear ideas about taking this team and club forward.
"He is a great fit for what we are trying to build here. We are delighted to welcome Eddie and his staff to St James' Park and very much look forward to working together towards our collective ambitions."
Newcastle remain the only winless side in the Premier League this season and are 19th on the table after 11 matches.
