The 24-year-old made the temporary switch to Oakwell ahead of the 2023-24 campaign from Kenilworth Road and has enjoyed a productive spell as part of a two-man attack.
McAtee has bagged six goals and provided three assists in 25 League One appearances so far, with partner-in-crime Devante Cole grabbing 20 goal contributions for the Tykes.
After joining the Hatters on a permanent deal from Grimsby Town during the summer of 2022, the attacker was immediately loaned back to the League Two outfit for the 2022-23 campaign.
Speaking ahead of Barnsley's 2-1 success over fellow promotion hopefuls Leyton Orient on Saturday afternoon, Barnsley head coach Neill Collins revealed that McAtee could have moved away in January.
"It's amazing when you have a player of the attitude that Macca (McAtee) has got," said Collins ahead of Barnsley's third-tier clash with the O's.
"There was interest in January and while Luton were really happy for where Macca was, we were obviously very happy.
"He actually turned down the opportunity to go to the Championship, which I think says a lot about how committed he is to being here and how much he is enjoying it.
"He works so well and he has done really well and there's still a lot of room this season for him to develop."
As Collins alludes to, there was interest from a host of Championship clubs in McAtee during the winter window as reported by HITC, including Ipswich and Sunderland.
Kieran McKenna's Tractor Boys ultimately signed Bournemouth forward Kieffer Moore on loan, however the East Anglians were scrambling to bolster their attack following the injury suffered by George Hirst.
The Black Cats have been famously without a first-team central striker since the departure of Scotsman Ross Stewart to top-two chasing Southampton.
It is also understood that sides further down the Championship standings were keen on securing the services of McAtee, with Cardiff City and Plymouth Argyle admirers of the 24-year-old.