Arsenal was said to have made two bids for the Brazil international during the most recent transfer window, with reports suggesting the Gunners' second offer of £23 million ($41.3 million) fell some way short of Villa's £40 million ($71.9 million) valuation.

Luiz's previous contract with Steven Gerrard's side was set to expire at the end of this season, and the 24-year-old was also linked with Serie A champion AC Milan.

However, Luiz has agreed a new deal to remain Villa Park, where he arrived in 2019 after a two-year spell at Manchester City.

He said: "I love this club. This club opened the door for me when I came to England to play in the Premier League. I'm so happy because I’m staying here and my choice is here."

Luiz is set to face Chelsea in the Premier League on Monday (AEDT), with boss Gerrard under pressure after a poor start to the season.