The extension to his current deal, reportedly worth around £120,000 a week, will keep the 25-year-old England international at Anfield until 2023.
Oxlade-Chamberlain returned to first-team action in April after spending a year sidelined with a serious knee problem.
He sustained the knee ligament injury playing against Roma in the first leg of last season’s Champions League semi-final on April 24, 2018.
The former Arsenal and Southampton midfielder suffered a setback on his first return to action, coming off before half-time playing for Liverpool’s U23 side in March.
Jurgen Klopp introduced him twice before the end of the season, bringing him on as a substitute against Huddersfield and Wolves.
Oxlade-Chamberlain was an unused substitute in Liverpool’s Champions League final victory over Tottenham in Madrid.
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