England forward Sterling has established himself as a key man for both club and country over the last 12 months, and his impressive form had led to suggestions that European champions Real may be interested in taking him to Spain.
Liverpool's struggles this season had heightened speculation that the Premier League club could find it tough to keep hold of one of European football's most highly rated young players.
However, the 19-year-old - who is in the early stages of negotiating a new contract with the club - has insisted he sees Anfield as the perfect place for him to continue developing in the coming years.
"I am happy to be here for as long as possible," Sterling told the British media.
"Hopefully I can achieve the goals I want to achieve here at Liverpool in years to come.
"I am just happy to play football at this club for many years to come. The club has spoken to my representatives and hopefully something can be done soon."
Sterling found himself at the centre of a media storm last month when England manager Roy Hodgson publicly revealed the forward had admitted to feeling jaded ahead of his country's Euro 2016 qualifier in Estonia.
The teenager stated that while such unwanted attention and scrutiny was tough to deal with, he feels he has learned from the experience.
"It was pretty difficult - I tried not to watch TV or listen to anything," Sterling added.
"If I caught sight of a TV and the conversation was about me then I would turn over or turn it down.
"It was different, the first time I had to deal with anything like that, but I got through it quite well. I tried not to read too much into it.
"It didn't affect me too much because I know I love playing football for club or for country.
"If anything I said got taken the wrong way I am sorry, but it doesn't matter - I am happy playing football. That's what I want to focus on."
