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The Club and McKinnon were in the midst of finalising a contract extension prior to the young forward's injury in round three.
CEO Matt Gidley said the Knights would honour its contract offer, with McKinnon guaranteed employment at the club. The details of his employment will be discussed with McKinnon when he is ready.
"Alex is a wonderful talent on the field and a better Clubman off the field," Gidley said.
"While we remain hopeful Alex will make a full recovery, we are pleased to extend his contract at the Newcastle Knights because there is no doubt he'll be a valuable employee."
The NRL also announced today Alex would be offered a job for life, which will take effect once his Newcastle agreement is completed.
"I appreciate both the Knights and NRL's support at this time," McKinnon said.
"As I have said before, I am completely overwhelmed by all of the support I have received and to now have my future secured by the game, is really humbling."
NRL CEO Dave Smith applauded the Club for honouring McKinnon's new contract.
"Alex remains an inspiration for the game and for the rest of the team so this is a sound decision," he said.
"His contract will be exempt from the salary cap and I think everyone will be delighted to have him in our game while he recovers."
In addition to McKinnon's job for life, the NRL has plans for a fundraising ‘Rise for Alex'round, with details as follows: