Poulsen, 30, joined Juventus from Sevilla in 2008 and made 33 Serie A starts in two seasons in Turin. He also anchored the Denmark midfield in all three of the country's appearances at the World Cup finals.
A statement from Juventus read: "Juventus Football Club can announce that it has completed the agreement with Liverpool FC for the outright transfer of Christian Poulsen for a fee of €5.475 million (£4.5 million) payable in two instalments.
"The fee will further increase by up to €1.2 million depending on his achievements during the contract period.''
Liverpool also confirmed the deal on their official website and revealed that Poulsen has signed a three-year contract with the Reds.
Roy Hodgson has recruited the player as a like-for-like replacement for Javier Mascherano, who revealed on Thursday morning that while he enjoys playing for Liverpool, he is keen to leave England for a new challenge. Both Inter Milan and Barcelona are known to be interested in the Argentina captain.
"It's a very special club both in England and worldwide," Poulsen told sporten.dk. "I'm incredibly happy to have joined.
"We'll see in the coming days what kind of shape I'm in. I obviously trained at Juventus, but as the move to Liverpool drew closer, I wasn't involved in training, and I haven't played the Europa League matches so I would still be available [for Liverpool]."
Poulsen joins Joe Cole, Danny Wilson, Jonjo Shelvey, Fabio Aurelio and Milan Jovanovic in joining Liverpool this summer, and his international colleague Daniel Agger expects him to be a success at Anfield.
"Christian would be a perfect addition to most of the big clubs in Europe, so he will certainly fit in here," Agger said recently. "He is a top player and will make us stronger. We need to have big signings so we can compete and he is one of those players.
"Christian will improve the team. But we need more improvements if we want to be at the top of the league this season."
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