The transfer surpasses Spurs' previous record signing of Mateus Fernandes, who joined from West Ham United earlier this summer for 85 million pounds.
Tonali has signed a six-year contract after choosing Tottenham despite interest from several leading clubs, including Manchester City.
The 26-year-old said there was never any doubt about where he wanted to play.
"I'm very happy to be here. When I arrived at the Club today, it felt fantastic. People said there were four or five clubs, but for me there was only one.
"I spoke to the Head Coach for close to two hours about the Club, the fans, the stadium and our football. It was like magic because I knew immediately that I had to sign for Tottenham. I've played against Tottenham a few times and always found a great atmosphere created by great fans. I can't wait to start the season."
Sporting director Johan Lange described the Italy international as one of Europe's finest midfielders.
"Sandro is one of the best midfielders in Europe and we are delighted to welcome him to the Club.
"He has outstanding technical quality, football intelligence and the character to thrive in a demanding environment. He brings experience at the highest level in domestic and European football, and I know our supporters will love his energy and commitment."
Head coach Roberto De Zerbi also welcomed the signing and revealed he had admired Tonali for many years.
"Sandro is a special player and a great signing for our Club.
"I have followed him for a long time because he came through the youth system at my hometown club, Brescia. There was a lot of interest in him this summer, but he made it clear that he wanted to join Tottenham. I know our fans will love what he brings to the team."
Tonali arrived at Newcastle from AC Milan in 2023 for 55 million pounds and made 110 appearances for the club. After returning from a 10-month suspension for breaching Italian gambling regulations, he re-established himself as a key figure in Newcastle's midfield and helped the Magpies end their 70-year wait for a major domestic trophy by winning the EFL Cup.
Milos Kerkez believes Liverpool are in for "exciting times" under new head coach Andoni Iraola after being reunited with the manager who helped shape his career at Bournemouth.
Bosnia and Herzegovina defender Tarik Muharemovic is set to complete his medical with Leeds United to complete his move from Serie A side Sassuolo this summer.
Italy coach Gonzalo Quesada has been handed a two-Test suspension by World Rugby, becoming the first coach to be banned under the newly implemented Match Official Abuse Sanctioning Process.
Youri Tielemans has bid an emotional farewell to Aston Villa after sealing his move to Manchester United, with the midfielder posting a heartfelt video on social media.
