The 21-year-old had been in negotiations with the Biancocelesti for a number of weeks before finalising fresh terms on Monday.
Lazio have failed to disclose the details of the deal, but reports have suggested that the Nigerian international has penned a two-year extension.
"It's important to know that your future at the club is sorted; I've always insisted that I love it here and I'm delighted to stay," Onazi is quoted as saying by BBC Sport.
"My focus and desire is to give my best in the club colours and continue to enjoy the love and warmth of our fans."
Onazi signed his first professional deal with Lazio in 2012 following a spell in the club's youth academy.