The 21-year-old forward joined Newcastle's Academy as a 14-year-old and, after progressing through Newcastle's youth set-up, signed his first professional contract with the Magpies in the summer of 2021.
The Blyth-born youngster, who made his first-team debut for his boyhood club during a pre-season friendly against Atalanta at St. James' Park in July 2022, spent the second-half of the 2023-24 campaign on loan at South Shields, scoring eight goals in 17 games for the National League North outfit.
Stephenson, who scored his first senior goal for Eddie Howe's side during a 5-0 win against Saudi Pro League side Al Hilal in December 2022, will link up with the Daggers on Monday, 1st July following the expiration of his contract with the Magpies.
Everyone at the club would like to wish Dylan the best of luck for the future.