You mentioned the lying has gone of for several years which begs the question how old is the child? I personally think that the age of the child would dictate the severity of consequences.
I have younger children and they do not realize they are lying. They are just starting to understand what a lie is and what happens when they lie they are 3 and 4.
If the child is older 6,7,8 I would go with the taking away toys, taking away priveldges etc. I would also ask the child why they think it's ok to lie or why they lied in the first place. Then intiate the consequence...
If the child is older 10+ I would get serious about consequences and their severity. I firmly believe that the lies become more dangerous as they age simply because the activites they engage in or their friends engage in become less and less monitored. In this case it's no holds barred, they've had the oppurtunity to learn about lying, the've seen the consequences and not learned from them now they need serious punishment 2 weeks grounded from TV, Internet, XYZ anything they enjoy is taking away. To school, homework, dinner, bath, bed or some form of that.
If the lying continues it's definitly time to get a therapist involved, keep track of any lying or other "odd" behaviors as the therapist will also want to know what else is going on at home, school and just in general to dig deeper for the root cause.
Good luck I can only imagine the frustration and worry that accompanies this question.