Brazil defender Luiz was less than two years into the five-and-a-half-year deal he penned when joining the Blues in January 2011.
But the European champions moved to tie the 25-year-old down until 2017.
Luiz said: “I am very happy to sign a new contract with Chelsea.
“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.”