The 24-year-old is believed to have penned a five-year contract with the Reds.
Clyne is the club's sixth summer signing following the arrival on Merseyside of James Milner, Danny Ings, Roberto Firmino, Adam Bogdan and Joe Gomez.
"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," Clyne told Liverpool's website.
"As soon as Liverpool showed their interest in me, I was happy and just wanted the deal to go through.
"The gaffer has shown a lot of interest in me and this is a place where I can improve as a player, I think. It's definitely a good opportunity to come here and try to fulfil my potential.
"I've played at Anfield before and know what the atmosphere is all about. It's a great atmosphere and will make me rise to the challenge. I'm really looking forward to it and hopefully it can push me on to putting on good performances."