Liverpool manager Jurgen Klopp claims the Reds handed Dejan Lovren a new deal hoping that the centre-back will improve in the future.
The Croatian international moved to Anfield from Southampton in 2014. After a difficult start to his Liverpool career, Lovren transformed his game at the end of the last season under the former Borussia Dortmund manager's guidance.
Lovren signed a contract extension on Friday and the new deal will keep him at the club until 2021. The Mirror reports the defender has signed a staggering new £25m ($32.38m) contract, which will see him earn £100,000 a week ($129,520 per week).
Mamadou Sakho was not included in Klopp's plan for this season, forcing him to join Crystal Palace on loan in Janaury. This has allowed Lovren to form a partnership with Joel Matip in the heart of Liverpool's back-four.
The former Saints man has started in 25 league games for the Merseyside club this season. Klopp expressed his delight after the Croatian international signed a new deal and he remains confident that people are yet to see Lovren's best game.
"I am really happy about this decision. If Dejan played for another club, you would think about signing him. Then you would have to think about what would you have to pay for him and it would be a lot - a big sum of money," Klopp told Liverpool's official website.
"Having him around and giving him a new contract and working with him together... he is 27 years old and his best time for a centre-half is still to come.
"I don't know exactly about it but I heard about a difficult start at Liverpool, but he has really settled, so that's really good, really good. He is physically strong, he is quick and he is a good footballer.
"Sometimes of course, decision making could be better. But that's how it is and nobody out there – and we watch a lot [of players] all the time – is perfect.
"So we really think he can help us a lot and we can help him in a few decisive parts of his game. That's what we want to do and that is really good, so I am happy about the news."