The 29-year old moves to Anfield after helping Bayern win the Bundesliga, the German Cup and UCL last season
Liverpool signed Spain midfielder Thiago Alcantara from Bayern Munich for a reported fee of £20m ($26m) Friday.
Alcantara agreed a "long-term contract" with the Premier League champion after deciding to end his seven-year stay with Bayern.
The 29-year old moves to Anfield after helping Bayern win the Bundesliga, the German Cup and Champions League last season.
It is believed Alcantara has penned a four-year deal with the Reds, who had been tracking him for several months and could pay Bayern another £5m in add-on bonuses.
Alcantara will wear the No 6 shirt at Anfield and becomes Liverpool's second signing since the end of last season after Greece left-back Kostas Tsimikas.
Alcantara joined Bayern from Barcelona as Pep Guardiola's first signing in 2013 but with a year left on his contract he had stalled over signing an extension and decided to try a new challenge.
He enjoyed a trophy-filled stay in Germany, winning seven Bundesliga titles, four German Cups, the Club World Cup and the Champions League last month in Lisbon.
Now Alcantara believes he can enjoy similar success with Jurgen Klopp's side.