He said this evening: “My heart is with Liverpool Football Club, so I’m delighted to sign this new deal.

“I love the club, the fans and the city and with a club like this and supporters like this, I could never say no to staying.

“I always made clear I wanted to be here for a long time and when I complete my new contract it will mean I have spent over a decade in Liverpool.”

Benitez added: ``The club is greatly respected around the world due to its incredible history and tremendous heritage. It is my aim to uphold those values and help create a new chapter in our history.

“Throughout this process, I would like to thank the owners for their hard work in finalising the deal. All of us at the club want the same thing, which is to be successful by winning major trophies.”

Co-Chairman Tom Hicks said: “It is wonderful news that Rafa has made a long-term commitment to the football club.

“Since he became Manager in 2004, he has been responsible for the great progress we have made. I know he will continue to build on his achievements as he has a tremendous hunger and desire to bring more success to the club, success our fans and everyone connected with the club deserves.”

Co-Chairman George Gillett added: “With Rafa continuing to manage the team, we can look forward to more great football and success on the pitch. He has special abilities and qualities which are admired here at the club and around the world.

“Coming after our excellent wins over Real Madrid and Manchester United, this gives us great momentum going into the final stages of the season.”