The 25-year-old made clear his desire to secure a move away from St Mary's on his return from the tournament and voiced his anger at Southampton's initial rejection of Liverpool's £20 million bid.
Lovren now becomes Brendan Rodgers's fifth summer signing and third from Southampton, after Rickie Lambert and Adam Lallana, and described Liverpool as "more than a club."
"It sounds amazing and it's a dream come true. I'm happy and glad to be here; I'm proud and can't wait to start," he told the club's official website.
"I know we have millions and millions of supporters - Liverpool is more than a club.
"I'm most looking forward to Anfield, of course. I played there last season in front of the crowd singing 'You'll Never Walk Alone'. That is something very special for every player, every sportsman and every fan. I can't wait to get started."
Lovren said that he would take a number of fond memories with him from his time at Southampton but is keen is link up with a new set of team-mates.
Asked about familiar faces being a plus, Lovren answered: "Yes, of course, but it's not just Rickie or Adam, I also want to meet the other lads and I can't wait to start with them.
"They are top players and top lads. Of course I know Adam and Rickie a lot better from last season - they are great players and they deserve to be here.
"Rickie [Lambert] scored a lot of important goals last season and I learned a lot of things from him. He was like a leader for us.
"I really enjoyed playing with Adam last season - it was amazing. He was the main player, playing all of the games. Like Rickie, he is a great leader, even though he is only 26.
"Now the dream has come true and we will get the chance to play together."