The 19-year-old is a developmental player so will not be allowed to move for free, with a tribunal likely to price the move at around £3 million.
He has, however, agreed personal terms and is ready to open an exciting new chapter in his career.
A statement on Liverpool's official website read: "The 19-year-old striker will complete the transfer to the Reds on July 1, 2017, upon the expiry of his contract with his current club, Chelsea.
Dominic Solanke: A profile. pic.twitter.com/OIFIowWb0G— Liverpool FC (@LFC) May 30, 2017
"Solanke made his senior debut for the London side as a substitute in a Champions League tie in October 2014, and scored seven goals in 25 Eredivisie appearances during a productive loan spell with Dutch outfit Vitesse Arnhem in 2015-16.
"He has represented his country at every age level from U16 to U21 and is currently in South Korea for the FIFA U20 World Cup, where the forward has so far featured in all three games and scored once to help England into the knockout stages.
"Solanke, twice an FA Youth Cup champion and winner of the UEFA Youth League and U17 European Championship, will officially join Jürgen Klopp’s squad on July 1."