According to Justin Barrasso of Sports Illustrated, Barrett said the new contract is a one-year agreement but features an option to extend the partnership.
"I hope this lasts for a long time, that's our intent," he said. "So there is no bad news to share, but never forget, there is always a little bad news up my sleeve."
The 40-year-old, whose real name is Stu Bennett, will join Vic Joseph and Beth Phoenix in providing commentary for NXT.
Barrett spent about 10 years with WWE as a wrestler, winning the Intercontinental Championship in 2012.
He left the company in 2016 while dealing with a neck injury but explained that it's his choice to move into commentary, per Barrasso:
"Pro wrestling has always been a true love of mine, especially commentary. Physically, I feel 100%. My body feels incredibly good. I’m not doing commentary because I had a career-ending injury. I want to focus on commentary because I’m passionate about it. That’s not to say I won’t pull the boots back on at some point, but commentary is my focus and I am extremely excited about it."
He began announcing NXT events in August and continued over the past few weeks, but will now take on the role full time.