Atletico Madrid have extended the contract of Liverpool target Diego Costa by three years until June 2018.

The 24-year-old Brazilian striker was the subject of a £21m bid by Liverpool on 1 August.

Costa joined Atletico from Valladolid in 2010 and scored 10 goals in the Primera Liga last season.

“I am very happy with the deal, it is a very special moment,” he told Atletico’s website.

“I am delighted with this agreement after fighting for a long time to win the respect and affection of the fans, my team-mates and people in the club.”

Costa is likely to form a formidable striking partnership with David Villa, who joined Atletico from Barcelona for an initial £1.8m in July.

Atletico finished third in La Liga and will play in the Champions League. They beat Real Madrid to win the Copa del Rey.

They sold striker Radamel Falcao to Monaco for a reported £50m fee on 31st May.

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