The Magpies have continued their recruitment drive following their relegation from the Premier League and have snapped up the young defender on a lengthy contract
Hayden, who is primarily a defender, is a product of Arsenal's youth system and made his debut for the club in 2013, before spending the 2015-16 season on-loan at Hull City.
The 21-year-old can also turn out in midfield, and did so on occasion as Hull went on to win promotion to the Premier League during his season at the club.
And speaking to the club's official website following the move, Hayden said: "Newcastle is a massive football club and to be given the opportunity to come here and progress my career is fantastic." "Being at Arsenal was a great experience, I learnt a lot there and have a lot to thank them for, but I needed to move on and so when Newcastle came in for me I jumped at the chance.
"I am still young but I want to get as many games under my belt as I can and help the team bounce back to the Premier League."
Newcastle boss Rafa Benitez, who was begun re-shaping the club since the Magpies' relegation from the Premier League last season, also indicated his delight at the deal that brought Hayden to the club.
"We continue with our plan to bring in players who are hungry to succeed and prove themselves, which Isaac really is," the Spaniard said.
"He is also a player who can play in different positions, which is very useful.
"Isaac is a young, strong English player with fantastic potential but also with some experience already of the Championship. We welcome him to the Club."