Liverpool completed the signing of Scottish midfielder Charlie Adam from relegated Blackpool on Thursday, the English Premier League club confirmed.
The 25-year-old put pen to paper on his new contract after successfully completing a medical, the club's official website said.
Liverpool had previously had two bids rejected in the January transfer window for Adam, with the highest offer reported to be in the region of £6.5 million ($10.4m).
This time, however, it is understood that Blackpool accepted £7.5 million rising to £8 million depending on appearances.
"I am absolutely delighted to be here," Adam told www.liverpoolfc.tv after his medical at Anfield.
"It has been a long process but now I can't wait to get started and hopefully this will be a successful period in my career and in the club's history.
"Liverpool is a massive club with terrific players and a terrific manager. You have seen since the new manager came in the forward strides that have been made.
"Kenny (Dalglish) has a terrific respect from players and people in the game. He is a wonderful manager and it's an honour to be able to say I'm going to be able to play for Liverpool.
"I see this as the perfect development for me to come here, play with such wonderful players and hopefully help the team to win trophies, because that's the most important thing."
Adam scored from the penalty spot against Liverpool last season during Blackpool's shock 2-1 Anfield victory.
But now he is looking forward to winning over the supporters.
"Since I've known about Liverpool's interest I've been looking at the website and obviously playing here last season, the passion of the supporters, they know what it means and they're there to support the team.
"That's what you want as a player, to know the fans will back you to the hilt through thick and thin. I tasted Anfield last year, scoring here was an unbelievable feeling and hopefully I've got many more days like that as a Liverpool player."
Liverpool director of football Damien Comolli added: "I'm very pleased. It's been a long chase since the end of January but we've always kept our interest because we knew he was a quality player.
"We knew he was very, very, very keen on coming here, he wanted to wear the Liverpool shirt. For Kenny, he was a priority and we've done everything we could to get him. We are delighted."
Adam was shortlisted for the Premier League Player of the Year award last season after scoring twelve goals in 35 league appearances.
The former Rangers player becomes Liverpool's second summer signing, following the capture of young England midfielder Jordan Henderson from Sunderland last month for a fee reported to be in the region of £20 million.