Espanyol announced via their official website that the veteran stopper arrived in Barcelona for an undisclosed fee.
A seasoned international, Finnan most recently contested a match for the Republic of Ireland last week as Giovanni Trapattoni's men took on Georgia.
However he had yet to play a Premier League game for his club side this season, Liverpool coach Rafael Benítez preferring to use Alvaro Arbeloa at right-back.
Thus Finnan, who had been with the Anfield club for five seasons, was deemed surplus to requirements and allowed to move on.
Espanyol, needing a replacement for Manchester City-bound Pablo Zabaleta, moved quickly to seal the signature of the former Fulham maestro.
Due to the fact that he won't formally leave the city of Liverpool until the middle of the month, he will miss the chance to make his Liga debut in Matchday 2 against Recreativo in Huelva. Instead he could start against Getafe at home.
Steve Michaels, Goal.com