The midfielder becomes the club's third signing of the summer following former Southampton team-mate Rickie Lambert and Emre Can from Bayer Leverkusen.
The England international thanked Southampton for helping him become the player he is today and is looking forward to the "next chapter" in his career.
"I'd just like to thank everyone at Southampton for what they've done for me," he told the club's official website. "I've been there for the best part of 14 years now and I'm so excited for the next chapter of my career.
"Coming to a special club like Liverpool... I'm quite humbled and just can't wait to get started."
Watch the entirety of Lallana's new interview below.