The 51-year old has committed himself long-term to the Magpies by penning the contract which will see him remain at Sports Direct Arena until the end of the 2019/2020 season.
"If you look at clubs like Manchester United and Arsenal, Sir Alex Ferguson and Arsene Wenger have shown that stability gives you the best platform to achieve success, and that is the model we wish to emulate here," Llambias told the club's official website.
"We're looking to build on the success we had last season and these new contracts are aimed at keeping the Club progressing on and off the pitch, as we have done since returning to the Premier League in 2010.
"Alan has done a fantastic job over the last couple of years and has proved what a great Premier League manager he is. I have total respect for him in all football matters and have an excellent relationship with him which I think benefits the club enormously.
"Alan also has one of the best backroom teams in the country and I would like to thank John Carver, Steve Stone, and Andy Woodman for all their combined efforts.
"We hope this announcement will be great news for the fans, whose support and commitment to this club over the years has been fantastic."