The 24-year-old Brazilian, who joined the Anfield team in July 2007, has attracted praise for his performances this season having been criticised for inconsistency early in his Liverpool career.
"We are delighted," manager Kenny Dalglish told the club's website, without disclosing the precise length of Lucas's new deal.
"Certainly since I came in (in January) he has been a great asset to the team and has done tremendously well. He's happy to be here and play for the club and he's getting everything he deserves at the moment."
Lucas has appeared in 25 of Liverpool's 30 Premier League games this season and played for Brazil in the 2-0 friendly win over Scotland on Sunday.
Sixth-placed Liverpool visit lowly West Bromwich Albion on Saturday.
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