The 20-year-old arrives at Newcastle with international pedigree, having made her senior debut for Northern Ireland in July 2023, against Czechia.
Formerly of Mid Ulster Ladies, Woods further strengthens Becky Langley's squad and goalkeeping options, with Grace Donnelly, Hannah Reid and development stopper Elen Valentine already on the books.
Upon signing the young keeper, Langley said: "Lillie has experience with the Northern Ireland first-team squad.
"She's coming to bolster our goalkeeping ranks. She's already settled in well with the goalkeepers' union and we are excited to provide her with a development opportunity."
Woods said: "I am very excited to be here and to be a part of this team. It feels great to sign for a club like Newcastle and I can't wait to get started and help the team improve and win as many games as possible."
Woods will be available for selection when the Magpies host Nottingham Forest Women at Kingston Park on Sunday.