The Uruguayan put pen to paper on an improved deal on Tuesday afternoon, a move that has been confirmed by the club on its official site.
It comes only 24 hours after Suarez returned to training at Liverpool to team up with new manager Brendan Rodgers for the first time following Uruguay’s exit from the Olympics at the group stage.
The striker has been recently linked with a move to Juventus after the Serie A champion's attempts to lure Edinson Cavani from Napoli appeared to stall - but this latest development has called an end to the continued speculation over the 25-year-old's future at Anfield.
"To sign a new contract with Liverpool is unbelievable for me because I am so happy here at both the club and also in the city," the striker told the club's website after signing his new deal. "That is important for me and I am very happy with my new contract.
"When you are a kid, everybody wants to play for Liverpool. I am here now and it is a dream for me, and now I am a Liverpool fan."
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