The 19-year-old, who came through the Cobblers' youth ranks and scored 13 goals in 60 senior games, has agreed a "long-term deal".
The youngest player to represent Northampton, Toney is Newcastle's fifth signing of the summer.
Meanwhile, Magpies captain Fabricio Coloccini, 33, has signed a one-year extension to his contract, until 2017.
The new deal, which includes the option of a further year, comes 18 months after Coloccini asked to leave the club and return to his native Argentina for personal reasons.
He was recently been linked with a move to Crystal Palace - managed by former Newcastle boss Alan Pardew - although Palace denied any interest.
Toney's arrival was welcomed by Newcastle football development manager Peter Beardsley, who said: "We have been very impressed with Ivan already.
"He is a very good player, with great enthusiasm and a first-class attitude, and has all the attributes to have a bright future at the club."
Toney said: "The players here are a great standard and I can't wait to get going and show what I'm all about.
"Being a young lad who is scoring goals in the Football League was a great thing.
"Now I want to progress here and eventually do it in the Premier League."
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Newcastle United have signed striker Ivan Toney from League Two side Northampton for an undisclosed fee.