The former Gremio man was signed by former Reds boss Rafa Benitez - arriving at Anfield in 2007 - and despite a somewhat suspect start to his Anfield career, has cemented his place in the heart of Kenny Dalglish's midfield.
and speaking to club's official website, Dalglish admitted he was 'delighted' to retain the midfielder's services.
"We are delighted," said Dalglish."He is a smashing lad to have around the football club but he hasn't been signed for that, he has been signed because of what he does on the pitch.
"Certainly since I came in he has been a great asset to the team and has done tremendously well.
"He's got wee Pedro [Lucas' son] to look after and now a new contract as well, and we're delighted for him because he's a really honest, genuine fella and that's reflected in the way he plays.
"He's happy to be here and play for the club and he's getting everything that he deserves at the moment - including being a fixture in the Brazilian team - because of what he's done on the pitch."
And Damien Comolli, Liverpool's director of football, was quick to support Dalglish's stance; lauding the Brazilian as a player the club 'couldn't afford to lose', with speculation mounting that the midfielder was being monitored by Europe's elite sides.
"One of the first things I did after I arrived was to look at the contract situation and to see where Lucas was at. I knew we had to do something quickly because we couldn't afford to lose him and didn't want to lose him," said Comolli.
"He could have gone to many clubs because he is highly rated around Europe, but he always said he wanted to play for Liverpool."
"If you look at his playing record he started 46 games last year in all competitions and this year it will be between 45 and 50," he added.
"He is exactly what we want. He has the right mentality, quality and attitude. He understands what this club is all about and even though the discussions went on for quite a long time he always said to me 'I want to stay and we need to find a solution'.
Informing the Liverpool fans through his official Twitter account, Lucas announced: "Very Happy DAY !!!! Just to let you all Know I have signed a new deal with Liverpool. YNWA"
Having retained the services of one of the club's senior players, on the back of the January signings of Luis Suarez and record acquisition Andy Carroll, Comolli believes that the club is show the right ambition to match Liverpool's standing within the game.
"This shows stability," Comolli added. "What we did during the window showed ambition and what we have done with Lucas - and other players we are talking to - shows stability.
"We want to keep the core of the players we have who are performing and performing well."