The midfielder will wear the No 6 jersey for Liverpool who will pay £20m across Thiago’s four-year contract with the potential for £5m in add-ons.
The move to bring Thiago Alcantara to the Merseyside had initially looked like it was dependent on the future of Liverpool’s midfielder Georginio Wijnaldum, who is also in the final year of his contract, but Liverpool have decided to make their move now.
Thiago, who helped Bayern win the treble last season, would undoubtedly be adding quality to the Liverpool side.
Bayern boss, Hansi Flick, paid tribute to Thiago on Thursday and revealed he had said his goodbyes to players and staff at the club.
“Thiago is an exceptional player who spent seven hugely successful years here,” Flick says. “He’s a wonderful person and an outstanding professional. It was very emotional today when he said goodbye to us all.”
Bayern chairman Karl-Heinz Rummenigge, back in July, revealed Thiago had told the club he wanted a new challenge.
Rummenigge admitted talks between the player and sporting director Hasan Salihamidzic over a new deal had broken down as he wished to leave Germany and said the club would accept a “reasonable price” for him.
The Spain international was handed his debut by Pep Guardiola in 2009 at the age of 18 for Barcelona where he started his career.
Thiago joined up with Guardiola again in 2013 when the new Bayern boss took him to Bavaria where he went on to win seven Bundesliga titles and four DFB-Pokal cups.