Skrtel, named Liverpool's Player of the Year last season, joined the club from Zenit St Petersburg in January 2008 and has gone on to make almost 200 appearances for the Reds.
He was reportedly a target for Manchester City but has now committed his long-term future to the Merseysiders.
Liverpool have not disclosed the length of contract, saying only that it is "long term".
"I'm happy because I am a part of one of the biggest clubs in the world," said Skrtel.
"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.
"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."