The 27-year-old, who was voted as the club's player of the year last season, had been linked with a £20m move away from Anfield.
However, he has agreed a new deal with the club, understood to be in the region of four years.
"I'm happy because I am a part of one of the biggest clubs in the world. After last season there was a lot of talk about my future but I have to say that the first priority for me was always to sign a new deal with Liverpool," he told the club's offical website.
"For me it's a great thing to play for Liverpool. I am proud to play for Liverpool with these great players - probably some of the best players in the world. I hope I can create history at this club and that the fans will always remember me - that's my target for the future."
Skrtel has made 175 appearances for the Reds.