The 25-year-old becomes Mark Hughes' fourth summer recruit following the arrivals of Erik Pieters, Marc Muniesa and Juan Agudelo.
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"Oussama had a few options and I’m delighted he has chosen to join us," Hughes told the club's official website. "He’s an exciting player, who has great pace and is very direct and will certainly add another dimension to what we already have at the club."
Chief executive Tony Scholes added: "Mark identified the need to add more pace to the team and Oussama certainly fits the bill in that regard.
"He is an exciting talent and will certainly strengthen the resources at Mark’s disposal this season."
Assaidi arrived at Liverpool last summer but struggled for first-team outings, making just four Premier League appearances.