The contract, starting next season, will be worth between £1.5 m and £10m, the full amount only being realised if Newcastle are playing in the Premier League over the four-year period.
Northern Rock chief executive Gary Hoffman says the continued sponsorship of Newcastle is important for the development of the company.
He says: “Brand awareness and promotion are important elements in the continuing development of the Company.
“However, we remain mindful of our responsibilities under Government ownership and only consider those advertising and promotion channels that deliver a high return on investment and good strategic fit. We believe that the sponsorship deal with Newcastle United provides both of these.”
A Northern Rock plc spokeswoman says she believes the relationship between Northern Rock plc and Newcastle United is very fitting, considering the recent problems surrounding both.
She says: “The two entities, both Newcastle United and Northern Rock plc, are in a similar position in a way, and I think that forged relationship at the time is very apt.
“There has been a long-standing relationship between the Northern Rock brand and Newcastle United Football Club, which dates back to 2004 and represents an important community link.”