In the Northern part of the Netherlands ASTRON is building the largest radio telescope in the world for low frequencies. The telescope is based on phased array principles and is known as the LOw Frequency ARray (LOFAR). LOFAR is optimized for detecting astronomical signals in the 30-80 MHz and 120-240 MHz frequency window. LOFAR detects the incoming radio signals by using an array of simple omni-directional antennas. The antennas are grouped in so called stations mainly to reduce the amount of data generated. More than fifty stations will be built, mainly within a circle of 150 kilometres in diameter but also internationally. The signals of all the stations are distributed to the central processor facility, where all the station signals are correlated with each other. In this paper the signal processing aspects on system level will be presented mainly for the astronomical application.