The midfielder, a product of Tottenham's academy, played 40 times on loan at the Tigers in 2013-14, scoring three goals and helping Steve Bruce's side reach the Europa League
The 24-year-old spent last season on loan at the KC Stadium, helping the Tigers to Premier League survival and a run to the FA Cup final, where they lost 3-2 to Arsenal at Wembley.
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Livermore told the club's official website: "I'm delighted to be joining Hull City on a permanent basis.
"I thoroughly enjoyed my season here on loan and I firmly believe that this club will keep on going from strength to strength.
"I made my feelings known that I wanted to come here permanently and, once the two clubs had agreed the fee, it was very straightforward."
Livermore graduated from Tottenham's academy and made 58 appearances for the north Londoners before featuring prominently under Steve Bruce in 2013-14.