The Brazil international has made 208 appearances for the Reds since joining from Gremio in July 2007.
Lucas has been troubled by a number of injury problems over the past couple of seasons and was out from mid-August until December with a thigh problem.
The 26-year-old's decision to extend his deal with Liverpool will come as a major boost to boss Brendan Rodgers as he looks to build for the future.
Lucas told the club's official website: "It's another long-term contract that I have signed - but it was the same feeling as when I first came here.
"I am really delighted to have the opportunity to play for this club. It's where I think I belong and where I wanted to stay, so I am very happy and looking forward to a few more years here.
"It was an easy decision because after the long period of my career I have had here, I would like to give the best of my time to this club.
"It was not a difficult decision to make and I am really looking forward to what will hopefully be a few more years with a lot of success."
Managing director Ian Ayre added: "It's fantastic. He has been such a great servant to the club and I think during the period he went through with his two injuries, he put so much work into it and the club supported him through it.
"He just goes from strength to strength. We said throughout last summer and January, we wanted to keep our best, experienced players, and this is another great example of that.
"The manager has said several times that as well as having a great, young squad, it's important we have experience and it's important we have characters. People like Lucas fit that.
"He'll tell you he's still very young, but in footballing terms he's experienced and a big part of the team."