After signing for the Merseyside club back in 2009, Aquilani has since made just 18 league appearances after costing Rafael Benitez a fee in the region of £17m.
However, a move has been on the cards for some time after the player was flown back early from the club's pre-season tour of North America to help force through the switch.
Liverpool confirmed the deal on their official website, while Fiorentina president Andrea Della Valle told reporters "we have bought Aquilani" at the club's pre-season training camp in Moena.
|28/1||Liverpool are 28/1 with bet365 to win the Premier League next season|
It was originally thought that under new management, with Brendan Rodgers now at the helm, the Italian would be granted more first-team opportunities after spending the last two seasons out on loan with Juventus and AC Milan, but he has since been deemed surplus to requirements.
It represents the latest move in Rodgers' re-shaping of the squad since taking over the reins this summer from predecessor Kenny Dalglish, with striker Andy Carroll's future also up in the air.
The former Swansea boss has already openly stated that the club are considering moves for Swansea's Joe Allen and Fulham's Clint Dempsey this summer as well as admitting Carroll could depart Anfield.
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