Lieberknecht, who has been in charge of Braunschweig since 2008, oversaw notable success last season as the club ended their 28-year wait for a return to Germany's top flight.
The club have struggled to adapt and lie bottom of the table this term with 15 points from 22 matches.
However, sporting director Marc Arnold has labelled Lieberknecht's performances as "outstanding" and the latter is delighted to be staying put.
"I am pleased with this great vote of confidence," he said. "I identify myself with this incredible club.
"I want to establish the club in the next few years in the game."
Braunschweig host Borussia Monchengladbach this weekend and Liberknecht anticipates a tough challenge despite the visitors being without a win in seven matches.
"Gladbach is an exceptional team," he added. "Especially in attack with players like Juan Arango, Max Kruse, Patrick Hermann and Raphael.
"We will give them a lot of respect."
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