As he continues his promising recovery from spinal injury, Alex McKinnon looks set to play a key role in the NRL for years to come.

The Newcastle back-rower's strength in adversity has been an inspiration to all with even just a passing interest in rugby league.

On Wednesday the Knights moved to extend McKinnon's playing contract beyond this year, just hours after the game's governing body offered him a "job for life".

Newcastle remain hopeful McKinnon, 22, will make a full recovery from the injury sustained in round three against Melbourne.

At the time the Knights and McKinnon were in talks over his playing future, and on Wednesday Newcastle confirmed they would honour that contract, guaranteeing him employment at the club.

Newcastle did not release the terms of the updated contract, saying the details of McKinnon's employment would be discussed when he was ready.

"Alex is a wonderful talent on the field and a better club man off the field," Knights chief executive Matt 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 unveiled plans on Wednesday to provide a job for life for McKinnon as part of a five-point plan to support him during his recovery.

The Knights forward revealed over the weekend that he was getting more movement in his arms and had feeling in his legs, four weeks after he was injured in a tackle.

He was also a surprise guest at Newcastle's clash against Canterbury on Saturday night at ANZ Stadium.

A special foundation will be set up to raise funds for McKinnon, starting with a "Rise for Alex" round 19 of the premiership from July 18, with a range of family activities and promotions.

McKinnon will join the NRL when his agreement with Newcastle is finished.

"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 boss Dave Smith welcomed the Knights' move.

"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." AAP