Liverpool have beaten off competition from Manchester City and Chelsea to sign Portsmouth and England full-back Glen Johnson on a four-year deal.
Although the transfer fee for the 24-year-old is undisclosed, it is believed that the Reds had an £18.5million offer for the player accepted earlier in the month.
Liverpool boss Rafa Benitez said after completing his first major signing of the summer: "We knew the market was going to be difficult this summer and some of it has been crazy.
"Manchester City and Chelsea were there - they were making offers. We had to be quick and the club acted quickly.
"It was down to the player whether he chose us or City or Chelsea and he chose us. It was very clear from talking to him that he wanted to play for Liverpool.
"He is English and that is important for the Champions League list. We were thinking about improving the team and Johnson is a very good player who will do that.
"He was important at Chelsea and in the last year at Portsmouth he has improved and is much better. One of the main things is his mentality - it's really good.
"He is a winner. I was impressed with the conversations I had with him. He wants to improve.
"There are two or three clubs asking about Alvaro Arbeloa. He would like to stay but he knows the competition will be hard.
"We could buy one more player without selling anyone. We now have to wait."
Johnson made exactly 100 appearances for Pompey during his spell with the club, finding the net four times.
He has also started England's recent World Cup qualifying successes against Ukraine, Kazakhstan and Andorra.