The 26-year-old told manager Simon Grayson his intention to stay at Elland Road before United's 2-0 defeat at Exeter City.
Beckford will now remain with Leeds until the end of the season when he will be able to walk away on a free transfer due to his contract having run out.
The about-turn, having submitted a transfer request to the Yorkshire club on December 30, will come as a huge blow to Newcastle United who only last week submitted a fourth unsuccessful bid for the striker of around 2m amid speculation Wolverhampton Wanderers are also keen to sign him.
But Beckford, who would have trebled his wages with a move to St James' Park this month, said: "It was never a comfortable decision to ask for a transfer in the first place.
"But after the game against Manchester United and the unbelievable reaction of the Leeds supporters in the Wycombe game, I have decided I want to finish what I have been striving to do for the last two seasons – and that is to help promote Leeds United out of a division where the club doesn't belong."
Beckford's decision has been welcomed by Grayson, even though it will cost the club a substantial amount of money due to their most valuable asset being able to walk away for nothing come the summer.
The Leeds manager said: "I never wanted Jermaine to leave and we have turned down offers for him. We could have cashed in knowing what could happen at the end of the season.
"But the chairman has backed me all the way, and it demonstrates what we are looking to achieve.
"Jermaine has always given 100 per cent and, hopefully, his goals will play a big part for us over the next few months.
"Promotion is our main aim but we are still in two cup competitions and have plenty of football to come.
"I am keen to draw a line under the whole situation and now we can move on together."
Beckford's change of heart will be a major disappointment to his former club Wealdstone who would have been due a significant cash windfall if the striker had been sold during the transfer window.
As part of the transfer that brought the former Chelsea junior north in 2006, the Ryman Premier League outfit would have been due 20 per cent of any profit made on the 95,000 they received from United.
And with Beckford likely to attract an even higher wage from a prospective new club come the summer due to being available on a free transfer, his departure seems more probability than possibility.
After Beckford joining Leeds from Wealdstone it took a loan spell with Scunthorpe United almost a year later for Beckford's career to ignite.
After returning to Elland Road following United's relegation to the third tier, Beckford's goalscoring prowess has come to the fore and he has since netted 74 goals in 130 appearances.
With the Beckford saga now put to bed, Leeds are likely to turn their attentions to possible arrivals with Max Gradel top of Grayson's wanted list.
The Ivory Coast wideman has been on loan with the Yorkshire club for the past three months but is due to return to Leicester City today.
Foxes manager Nigel Pearson revealed last week that Leeds had enquired about extending Gradel's stay but that the answer was no as the player was wanted back at the Walkers Stadium.
Despite that seemingly firm stance, sources in the East Midlands suggest a deal could still be done and it is believed United will return this week with an offer.