Diego Costa has firmly ruled out any remaining suggestion of him joining Liverpool this summer by signing a new three year contract with Atletico Madrid.

Brendan Rodgers' side lodged a £24m bid for the Brazilian forward last month as the club sought to strengthen their forward options when the prospect of Luis Suarez leaving Anfield was at its most possible stage.

Despite suggestions that Liverpool's bid was enough to meet a buyout clause inserted in Costa's contract, neither Atletico nor the player appeared keen on discussing a move to Merseyside and the Brazil international has now firmly devoted his future to the Spanish club by signing a new deal which will keep him at the Vicente Calderon until 2016.

"I am delighted with this agreement after fighting a long time to win the respect and affection of the fans, my team mates and people in the club," Costa told Atletico's official website.

"It's a very special moment, I am very happy here."

"I thank the club for making me this offer to spend more time here and hope to become a much bigger player and conquer all the objectives that the squad has."

Liverpool manager Rodgers appeared to concede defeat in the race to sign Costa over the weekend. Despite the club's ambitious opening bid the the Brazilian failed to register genuine interest in a move to the Premier League, leaving the Northern Irishman to consider other targets.

"I believe Costa has signed an extension. There's nothing in terms of players to add," Rodgers was quoted as saying over the weekend.

"We've signed players early on and we hope to sign more before the end of the window. In the meantime, there's nothing at the minute."

Costa is likely to play a key role in Simeone's new look attack this season as Atletico prepare for a season that includes another crack at the Champions League.

After the departure of Radamel Falcao, the club have brought in Spain's all-time leading goal scorer David Villa from Barcelona to partner Costa, while also recruiting Brazilian starlet Leo Baptistao from Rayo Vallecano.