The 24-year-old, who had one year left on his Southampton contract, has signed for a fee reported in British media to be around 12.5 million pounds ($19.57 million).
Clyne becomes Brendan Rodgers's sixth signing of the close season as the Liverpool boss continues to overhaul his squad following a frustrating campaign.
Clyne told Liverpoolfc.com: "I'm delighted and it's a dream move for me to come here and play for such a big club with all of its history. I can't wait to get started.
"As soon as Liverpool showed their interest in me, I was happy and just wanted the deal to go through."
Liverpool finished sixth last season -- one place above Southampton -- but have already bolstered their ranks with the signings of Roberto Firmino, James Milner, Danny Ings, Adam Bogdan and Joe Gomez.
Former Crystal Palace defender Clyne signed for Southampton in 2012 and has been a consistent performer on the south coast, making 94 Premier League appearances and scoring three goals.
He was a goalscorer for Southampton at Anfield on the opening weekend of the last campaign, blasting into the Kop end net in a 2-1 defeat.
His consistent form earned him his England debut against Slovenia last November and he has now got five England caps.
Clyne becomes the fourth Saints player to make the switch to Merseyside since the start of last season, following in the footsteps of Rickie Lambert, Adam Lallana and Dejan Lovren.
(Reporting by Mike Collett, writing by Justin Palmer. Editing by Mitch Phillips)
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