The 24-year-old has signed a five-year deal with the Magpies.
Townsend has made just three substitute appearances in the Premier League this season and was dropped for a Europa League match in November after a row with fitness coach Nathan Gardiner.
“Newcastle is a fantastic club with great fans, a great stadium and great tradition,” he told the club’s website.
“As soon as I heard Newcastle were interested in me, there was only one place I wanted to go so I can’t wait to get started.”
Newcastle United head coach Steve McClaren said: “Bringing Andros to the Club is a great signing.
“Andros is a winger with an old-fashioned style. He can play on the right or the left, is two-footed, quick, very direct and loves taking on defenders and crossing the ball.”