Struggling Championship side Rotherham have signed Burnley defender Daniel Lafferty on a loan deal for one month.
Blackpool's top scorer Steven Davies is set for the Bloomfield Road exit door after asking to speak to another club.
The Scotland U21 international has followed in the footsteps of fellow Hearts youngsters Gary Oliver and Shane Nicholson, and signed a new deal keeping him at the club until 2017.
Paterson made his first-team debut for Hearts in 2012 and has since featured for the club on 69 occasions, scoring 15 goals.
The 19-year-old can play in a variety of positions but his performances for Hearts at right-back last season saw him emerge as one of the most exciting young talents in Scottish football.
The news is a timely boost for manager Robbie Neilson as well as the club’s fans who have taken Paterson to their hearts after following his three goals against city rivals Hibernian.