The Egypt international had been linked with a potential move away from Anfield, with his previous contract set to expire next summer.
However, the Reds announced that Salah has put pen to paper on a new deal that will make him the highest-paid player in Liverpool history.
According to The Sun, the Egyptian considered making a return to Chelsea when talks over a new contract stalled.
New Chelsea owner Todd Boehly was prepared to sign Salah, with the player's agent informing Liverpool's owners Fenway Sports Group that his client was considering a return to Chelsea after leaving in 2016.
The report indicates that a possible move to the Blues persuaded Liverpool to up their offer to £350,000 a week.
Salah's new deal is set to keep him at Anfield until 2025. body check tags ::