The Uruguayan striker has been linked with a move away from the club this summer but the club has now announced that Suarez has agreed a new long-term contract.
"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," Suarez told the club's official website. "I am happy off the pitch because the people of Liverpool are good with me and my family. I try my best on the pitch and when you are happy off the pitch, you are happy on the pitch."
Manager Brendan Rodgers has also revealed his delight at securing the services of the 25-year-old for the foreseeable future.
"There were certainly a few clubs who were interested in him but over the off-season he and I communicated well - and he's committed himself for the long term here now," Rodgers said. "He's really looking forward to playing in this way of working. As a manager and for the supporters, I'm delighted because I know how important he is for them."
Suarez joined Liverpool from Ajax 18 months ago and has scored 21 goals in his 52 appearances at the club.