Newcastle splash out to sign Tonali from Milan for £60 million
Tonali, who joined Milan in 2020 from Brescia, helped the club to their first Serie A title in a decade in 2022 and to the semi-finals of the Champions League last season.
But the financial muscle of the Premier League was too good for Milan or Tonali to turn down as Newcastle made their first major move of the transfer window.
The Magpies, who are controlled by the Saudi sovereign wealth fund, will be back in the Champions League next season for the first time in 20 years.
"He is an exceptional talent and has the mentality, physicality and technical attributes to be a great fit for us," said Newcastle manager Eddie Howe in a club statement.
"At 23, Sandro already has important experience as a key player in one of Europe's top leagues and in the Champions League, as well as playing for his country."
Tonali, who has won 15 caps for Italy, also becomes Milan's record sale.
"First of all, I want to thank Newcastle United because they are giving me a huge opportunity for my career," said Tonali.
"I want to repay the trust on the pitch, giving it my all, as I always have. I'm really excited about playing at St. James Park. I can't wait to feel the warmth of the fans."
Tonali is Newcastle's second signing of the window after Gambian winger Yankuba Minteh, who joined from Danish club Odense and has since been loaned out to Feyenoord.