The Argentinian international has been at Liverpool for over a year now and has quickly established himself as a fan favourite as well as a starting place in Rafa Benitez' side.
"I am very, very happy and now I can concentrate just on playing football," Mascherano told Liverpoolfc.tv. "I said all along that I wanted to stay at Liverpool and now that I have signed I can say this is the best and the biggest moment in my career so far.
"From the first day I arrived at Liverpool the feeling was good and I knew this was where I wanted to play my football. The 23-year old has been linked with a possible move to Barcelona during the past few weeks but this news most definitely ends those rumours.
Although the figure hasn't been released it is thought that Liverpool spent around about the £18 million mark for the former West Ham midfielder. That is, in my view, slightly too much for Mascherano. I agree he is a good player but £18 million sounds a bit much to me.