The 23-year-old, who made 25 appearances for Sunderland during a season-long loan spell last term, has joined the Magpies for an undisclosed fee.
The former Seattle Sounders man will fill the void created by the departure of Daryl Janmaat, who moved to Premier League outfit Watford earlier on Wednesday.
Yedlin told Newcastle’s official website: “Newcastle is such a big and historic club, and I’m excited to have the honour of playing for them. Hopefully I can do great things here.
“I’m excited to learn under Rafa Benitez as well.
“I can’t wait to get started.”
Newcastle boss Rafael Benitez added: “We have known for a little while of Watford’s interest in Daryl Janmaat, so it was important for us to bring in a replacement immediately.
“In DeAndre we have a player who knows English football well. He has good experience, an attacking mentality, ability and great pace.
“I think he can do really well for us and will give us good competition on the right.”