Luiz has stated in recent weeks that he wanted to stay with Chelsea.
But there was some doubt whether he would be afforded a contract longer than a year.
Chelsea usually only offer contracts to players over 30 on a year-by-year basis.
But it seems Luiz has managed to convince club chiefs he can still show his worth to the club for at least another two seasons.
And Chelsea fans have let their feelings about the contract extension be known…
One said: “Big mistake. Gonna block Zouma coming in to the team who’s much better.”
Another feared Luiz signing would mean Willian would do, writing: “And we all know now his Restaraunt buddy Willian is going to sign a new deal as well.”
A third wrote: “HUGE mistake. He is good for the dressing room but not good enough to be one of our starting CB’s.
“Our board is living on nostalgia and this decision is more steps back instead of steps forwards.”
Another tweeted: “So you thought Luiz is the one to break the over 30 rule? We r in deep deep trouble.”
One more wrote, in anger: “Chelsea didnt broke +30 policy for cole lampard jt drogba but did it for luiz? Embarassing.”
Another simply went with: “BETTER BE A SQUAD PLAYER.”
One fellow Chelsea fan agreed, writing: “Better be a bench player.”
Someone else tweeted: “30+ policy broken for David Luiz mannnnnnnn….”
One wrote, in shock: “This is really big news?”
And another queried the length of the contract, tweeting: “Why 2 years contract? Why not 6months to observe him?”