The 24-year-old was entering the final 12 months of his old deal and was stalling on the offer because of concerns over playing time.
Origi earned cult-hero status last season with two goals in their remarkable 4-0 Champions League win against Barcelona in the semi-final.
He then scored in the final victory over Tottenham in Madrid and also scored an added time winner against Everton in the league.
“I’m very happy to be able to sign this contract and it gives you a boost at the beginning of the season, as well as the end of the season last year,” Origi told Liverpool’s website.
“It’s an amazing club, we have a good group, the staff are amazing. Even coming into Melwood, the people that work here and everything, you feel there is something special going on here.”
According to PA there is no release clause in the contract, something which had been rumoured as being under consideration by the Belgian, and the club take this as a sign of his long-term commitment.
Origi played 21 times last season and scored seven goals. The Belgian is expected to feature in Liverpool’s first pre-season friendly against Tranmere on Thursday.