"I'm over the moon for it to be sorted," Lallana told the club website after passing a medical at Melwood.
"I still can't quite believe it. I just can't wait to get started in pre-season and work with the team."
The captain's departure is a further blow to Southampton, who lost England defender Luke Shaw to Manchester United on Friday for a reported 30 million pounds and manager Mauricio Pochettino to Tottenham Hotspur in May.
"Lambert is up here already and he has been telling me all about it. It's great that I can continue my career with him as well," Lallana said.
"I've spent the last four or five years with him. We've had great careers at Southampton and achieved something special, but we're both thoroughly looking forward to the new challenge. It's Rickie's boyhood club and a club I can't wait to be a part of."
Liverpool, who finished runners-up to Manchester City last season, also last month agreed in principle to bring in promising German midfielder Emre Can from Bayer Leverkusen.
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Lallana made 235 league appearances for Southampton, scoring 48 goals, and was instrumental in helping the south coast club to an eighth-place finish last term with a record 56 points.
His form led to an England call-up, and he appeared in all three of England's World Cup matches, starting the goalless draw against Costa Rica.
"I'm grateful that Southampton accepted the offer in the end and granted my wish to play at such a fantastic football club, in Champions League football and competing for Premier League titles," he said.
Manager Brendan Rodgers said Liverpool had secured the service of one of the Premier League's top talents in signing Lallana.
"What is apparent about Adam is that his character is on a par with his talent.
"He is an exceptional young man and someone who has a love for the game - and, most importantly, a desire to progress and improve," he said.
"We have seen, over the past two seasons in the Barclays Premier League, he has a tactical awareness to adapt to what is required of him and to put the team above his personal ambitions.
"He has leadership skills and personal qualities that make him a special commodity and I am delighted we have acted decisively to make sure he is wearing a Liverpool shirt next season," he added.
(Reporting by Josh Reich; Additional reporting by Amlan Chakraborty; Editing by John O'Brien)
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