NEWCASTLE UNITED have exercised an option to convert Mikel Merino's loan deal into a permanent transfer, with immediate effect.

Merino initially joined the Magpies on loan from Borussia Dortmund in July, but the midfielder has now committed his long-term future to Tyneside, penning a five-year del which will keep him at St. James’ Park until 2022.

The move is a major coup for Newcastle, with Merino having impressed in his first two months with the club. Having paid an initial loan fee of around £1.5m to Borussia Dortmund, it is understood the Magpies have paid an additional fee of around £6.5m to make the transfer permanent.

Since arriving on Tyneside, the 21-year-old has featured in all seven of Newcastle's Premier League games.

During his time at Newcastle, the former Osasuna man has also made three appearances for Spain Under-21s, scoring twice – including his strike in their 4-1 win over Slovakia on Tuesday.

"I’m really happy to be here, and for this part of the contract to finally be official. I’m happy to be here for five more years and I hope to keep playing for this club and to give good things to all the people and the club," said Merino, in an interview with Newcastle's official website.

"I have been focussed on football always, but it’s good to know it’s now official and people will know it. I’m focussed on my displays and improving myself, and I’m really happy to have signed this contract."

Newcastle manager Rafael Benitez added: "I’m really pleased we have been able to bring Mikel to the club permanently. He has played very well since he joined us. He has settled in quickly, has a lot of quality on the ball and is keen to learn – that is a crucial part of his future development.

"He has made a great impression at the club, and he is a good professional. He has confidence, but he is still young and has things to improve. He has to keep working hard and playing well, and hopefully he can improve and enjoy playing here."