Striker Fernando Torres has signed a contract extension with Liverpool until 2013, the club has confirmed.
The 25-year-old has been a huge success since joining from Atletico Madrid two years ago and scored his 50th goal for the Reds on Sunday against Tottenham.
The Spanish international still had four years remaining on his original six-year contract.
But Liverpool have offered him improved terms and added an option to take the deal through to 2014.
Liverpool manager Rafael Benitez said: "Fernando is one of the best strikers in the game today and, at his age, can only get better.
"Every major side would want him in their team, but he has shown how much he wants to achieve success at Liverpool by committing his future to the club.
"He's a special talent but still has the hunger to improve his game."
last yr just come one, so fast need new deal? so scare he run away meh
Liverpool midfielder Javier Mascherano has denied reports claiming he is set to join Barcelona - and insists he is 'only thinking of the Reds'.
The 24-year-old angered Benitez at the start of May after confessing he was unsure over his long-term future, but he now has no doubts.
"I still have three years on my contract with Liverpool and I am happy there," he told TyC Sports.
"I am comfortable and thinking only of Liverpool. I don't know anything about an approach from Barcelona or any other club."
Talisman: Fernando Torres celebrates after scoring the opening goal during against Spurs on the final day of the Premier League season
Fernando Torres will remain a Liverpool player until 2013 after agreeing a new bumper deal at Anfield.
The 25-year-old star has agreed a new, improved contract with Liverpool, reflecting his standing as one of the world's top strikers.
His latest deal will place him in the same salary bracket as Steven Gerrard, who earns slightly less than £120,000 a week. Sportsmail understands that Torress will pick up close to £110,000 a week.
The Euro 2008 winner with Spain, who hit his 50th goal for the Premier League runners up in last Sunday's 3-1 victory over Spurs, was already tied to Anfield for the next four seasons after signing a six-year deal in 2007.
The new contract includes an option for a further year's extension to 2014.
Liverpool boss Rafael Benitez said: 'Fernando is one of the best strikers in the game today and, at his age, can only get better.
'Every major side would want him in their team, but he has shown how much he wants to achieve success at Liverpool by committing his future to the club. He's a special talent, but still has the hunger to improve his game.'
Torres joins Dirk Kuyt, Daniel Agger, Gerrard and Benitez in agreeing new deals at Anfield over the past two months.
£110,000 after tax or before tax? 
Please extend Mascherano's contract as well...he will be 27 when he finished his contract, that is the prime age for footballer...
Originally posted by omgukilledkenny:£110,000 after tax or before tax?
All seems like before lah... Just like what Rooney, Ronaldo, Gerrard, Lampard... are all getting... Ribery's one is "special order" cos I think he hear Arshavin's complain that although he is being paid more at Arsenal... but he is taking home lesser than what he used to get in Russia cos of the 50% tax compare to his previous 13% in Russia... He said he wasn't aware of the high tax in the UK before he signed for the gunners... lol
earn as much as possible then retire happily and enjoy life
Spain striker Fernando Torres has signed a new contract that could keep him at Liverpool until 2014, the Premier League runners-up said on Thursday.
The 25-year-old Torres, who had four years remaining on a six-year deal he signed in 2007, has been handed an improved package that includes the option of a further season.
"Fernando is one of the best strikers in the game today and, at his age, can only get better," Liverpool manager Rafael Benitez told the club's website.
"Every major side would want him in their team, but he has shown how much he wants to achieve success at Liverpool by committing his future to the club. He's a special talent, but still has the hunger to improve his game."
Torres, who hit his 50th goal for Liverpool in Sunday's victory over Tottenham, is one of the biggest names in the Premier League. His commitment to the club is a hefty boost as they look to end Manchester United's domination next season.
"We've made huge progress this season and now we need to take the next step," Benitez said.
"We are building something special here and securing such important players on long-term deals means we can move forward with confidence. This sends out a very positive message to everyone connected with the club."
As well as Torres, Steven Gerrard, Dirk Kuyt and Daniel Agger have all agreed new contracts at Anfield in recent weeks.
Originally posted by limpper:last yr just come one, so fast need new deal? so scare he run away meh
once increase pay , contract must change ... commitment also change .
110,000 pounds per week , it's going to break the piggy bank to buy him out at Liverpool FC .
wow 21 million in salary for 4 years .... take home about 10 million for 4 years .
I year nett about 2.5 million pounds i think , not much la .
After tax , 2.5 million not much la afterall .
Fernando Torres wants to win a trophy with Liverpool next season after signing an improved contract at Anfield.
"I want to remain here," said Torres on his official website. "Since arriving at Liverpool I feel that there's a bond and commitment.
"We listened to the club's offer, which came on the back of two seasons of positive work.
"My objective now is to win a trophy with Liverpool next year."
Torres has scored 50 goals in 83 appearances for the Reds and has formed a devastating understanding with captain Steven Gerrard.
Fernando Torres is delighted with his new contract at Liverpool.
"I want to remain here," Torres told liverpoolfc.tv. "Since arriving at Liverpool I feel that there's a bond and commitment.
"We listened to the club's offer, which came on the back of two seasons of positive work.
"My objective now is to win a trophy with Liverpool next year."
The new deal includes an option to extend his stay a further year to 2014.