Toney, 19, joined the Tykes on an initial 28-day loan in November and his stay at Oakwell was extended until January 9 earlier this month.
However, Newcastle are facing the prospect of losing Papiss Cisse for the busy Christmas period due to a groin problem, leaving them short of options up front.
Toney, who has scored two goals in eight appearances for Barnsley, is therefore heading back to St James' Park to boost Magpies boss Steve McClaren's strike-force.
Barnsley head coach Lee Johnson told his club's official website: "It's unfortunate with the situation that's developed but Newcastle have to protect themselves over the Christmas period.
"I had a nice call from Paul Simpson [Newcastle's assistant head coach] explaining the situation which I appreciate. It's the same with any loan and unfortunate for ourselves but Ivan is their player.
"He's done really well and helped himself to a couple of goals. I'd like to place on record our thanks to both Newcastle United and Ivan."
Toney has made three substitute appearances for Newcastle after joining them from Northampton Town in the summer.