The new deal will keep the 28-year-old at Sunderland until the summer of 2015.
Sessegnon has been a hit for Sunderland since joining the club from Paris St Germain in January 2011.
The new deal is subject to Sessegnon being granted an extension to his current work permit.
Sessegnon has been linked with the likes of Arsenal and Liverpool as well as a return to PSG in recent months.
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Since Guus Hiddink arrived at the helm, Chelsea have improved considerably after a tricky start to the campaign.
Newcastle United are staring down the barrel of relegation to the Championship for the second time in the past eight years.