The new five-year deal will keep the 25-year-old at Stamford Bridge until the summer of 2017.
“I am very happy to sign a new contract with Chelsea,” Luiz told the club’s official website.
‘It is a great club and I look forward to winning more trophies here.
“I want to play for a long time at the top level which is what playing for Chelsea means.
“I love everything about the club and especially the fans, who have made me very welcome and given me great support.”
Luiz joined Chelsea from Benfica in a deal worth around £21million 19 months ago.
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The start of the 2017-18 Premier League season is just around the corner and is shaping up to be one of the most competitive yet.
As always it is the so called “big clubs” that have splashed the most cash in the transfer window so far this summer. Manchester United or City? Arsenal or Tottenham? Who are the winners and losers of the transfer window so far?