Newcastle announced on Friday that Wilkinson had committed himself to the club till at least the 2005 season. He has agreed, in principle, to a two-year extension to his current contract.
Rob Andrew, Newcastle's Director of Rugby was delighted with the news: "This is fantastic news. Jonny has shown tremendous loyalty to the club, despite our current position.
"We are very ambitious and Jonny wants to be part of a successful side. We have constructed one of the finest rugby stadiums in the country and now must ensure success on the field.
"On a personal note, I am absolutely delighted and hope that Jonny stays and helps the club develop over many years."
John Parkinson, Chief Executive at Newcastle Falcons, also expressed his appreciation for the player's loyalty. "Jonny's commitment to the club is fantastic news for the team, sponsors and fans," Parkinson said.
"We have invested a great deal of time and money developing the Newcastle Falcons stadium into a world-class sporting facility, attracting and harvesting world-class players.
"This deal puts us in an enviable position and maintains our standing as one of the top sporting businesses in the region."
The news comes as a timely boost for the Falcons ahead of their crucial Zurich Premiership home match against Northampton Saints on Sunday.
The Falcons are currently last on the 12-team Zurich Premiership standings on 31 points, the same as Bristol and London Irish, and just one below Bath and Saracens. It is almost certain that one of this quintet will be relegated at the end of the season.