Former star John Arne Riise has hailed the move, describing it as a 'big statement'.
Salah scored an incredible 43 goals for the Reds during his first season at Anfield.
Just finished gym and seeing Salah have signed new 5 year deal! Great news and a big statement from Liverpool! Keeping and attracting the best players ⚽️ Love this!— John Arne Riise (@JARiiseOfficial) July 2, 2018
Salah is under contract with Liverpool until 2023 now and has netted a tidy pay rise as part of his efforts.
The Egyptian forward's outstanding form had sprung links to La Liga's big guns, and Liverpool are determined not to lose him, having sold Philippe Coutinho and Luis Suarez to Barcelona in recent seasons.
Extending his contract after just one season is a clear sign the Reds are not going to be messed around further.
Salah is key if Liverpool are going to mount a title challenge next season, and they will be looking to go one better in the Champions League after finishing as runners-up last year.