Jota has extended his stay at Anfield by two more years until the summer of 2027.
Jota signed a five-year contract when he joined Liverpool from Wolverhampton Wanderers for £40m in the summer of 2020.
The 25-year-old has exceeded expectations with the Reds, scoring 35 goals in 85 appearances across all competitions.
Jota has joined the likes of Mohamed Salah and Joe Gomez in penning new deals with Liverpool recently.
The Portugal international is currently sidelined with a hamstring injury and will miss Liverpool's Premier League opener against Fulham on Saturday.
"Well, [I'm] really proud, I have to say," Jota told Liverpoolfc.com after signing his new contract.
"Obviously since I arrived two years ago I established myself as an important player in this team - that's what I wanted from the beginning.
"Now, signing a new long-term deal, it's obviously from the club's perspective proof of the belief in myself as a player. For me, obviously it's really good to establish I'll be here for a while."
"Unfortunately for me I had an upset in this pre-season because I got injured [in the] last game of the season playing with Portugal," Jota added.
"So I was coming back in this pre-season, I felt it a little bit again. So it will be a few more weeks, I would say."
Liverpool manager Jurgen Klopp added: "As a striker who can play on the wing, he gives us so many options and since he came to Liverpool he has improved so much.
"I have said before that Diogo is the player we hoped he would be but also a little bit better, so long may this continue."
Jota has won the FA Cup and Carabao Cup during his time with Liverpool.
