The 20-year-old midfielder is the Reds' third signing of the summer, following Rickie Lambert and Adam Lallana to Anfield, and says he is thrilled to have signed for Brendan Rodgers' side.
"It was an easy decision for me to sign for #LFC after a good chat with the manager. It was important," he told the club's official website.
"LFC is a great club and the fans are amongst the best in the world. I am looking forward to the first game and can't wait to step on the pitch for the first time at Anfield."
"Emre is an exciting young talent and I'm delighted he's chosen Liverpool for the next phase of his development and growth as a player," he added.
"He has recognised that we are a club that improves and nurtures exciting, ambitious players and I'm looking forward to seeing him take those next steps forward for us.
"We have tracked his progress for some time and I have been impressed with his attitude and qualities when I have seen him play both in the German Bundesliga and the Champions League.
"He has many of the attributes we look for; charisma on the football pitch and courage to want the ball and make things happen."