The 20-year-old forward has impressed Colchester boss Phil Parkinson during a 10 weeks loan spell at Layer Road enough for the U's manager to turn the deal into a season long loan deal.
“Now that I’m playing regularly, it really was an easy decision to stay with Colchester. When I first arrived, I was in and out of the team, but things have settled down since then and, with first team football a bit more guaranteed, I am relaxed about my football." Fagan told the Colchester official website.
"I feel that I’ve got to grips with the pace of Second Division football now. It took a while because, however much reserve team football that you play, it is not quite the same as playing at first team level.”
Fagan will now remain at Layer Road until May next year.