Liverpool won the race for Chamberlain's signature after the midifelder rejected Arsenal's new offer and Chelsea.
With just one year remaining on his Arsenal contract, Chamberlain turned down a new offer following disagreements with Arsene Wenger over his role.
The 24-year-old who wanted to play and establish himself as a midfielder also rejected Chelsea who had already agreed on a fee with Chelsea.
The England international was not sure he was going to get chances in midfield at Chelsea who wanted him to play at right wing-back where he impressed with Arsenal towards the end of last season.
Ahead of Thursday, August 31 transfer deadline, Liverpool won the race for Chamberlain's signature as the club announced that they have completed his signing.
Chamberlain who is on international duties with England had his medical at St George's Park and has signed a deal with £120,000 a week.
"Firstly, I'm delighted to have signed for Liverpool and a big thank-you to everyone here at the FA that has made this possible, using the facilities. It has been a massive help," the midfielder said in his first address to Liverpool fans. "
"I'm not going to say too much today; I'm here with England and we've got two big games coming up, so I want to focus on them. But I can't wait to get to Melwood and you'll hear first from me on LFCTV."
Liverpool manager Jurgen Klopp is excited to get the midfielder who he has admired for a while.
"I am really, really happy we have got Alex signed. Since the last game I have been waiting and hoping we could make this transfer - and when I got the news he was ours it was fantastic," Klopp said.