The England international turned down an offer a new deal worth a reported £180,000-a-week from the Gunners to sign a five-year deal worth 120,000-a-week on Merseyside, having been determined to leave the north London club this summer, according to the BBC.
"Liverpool FC have completed the signing of Alex Oxlade-Chamberlain from Arsenal," a statement read on the Reds' official site.
"The England international penned a long-term contract with the Reds after a medical was conducted at St George's Park, where the 24-year-old is currently on duty with his country," the statement added.
Premier League champions Chelsea had also agreed a fee with Arsenal to sign Oxlade-Chamberlain, but the midfielder rejected the move after being made aware that he was being signed to compete with Victor Moses for the right wing-back position. The 24-year-old is keen to play in his preferred central midfield position - something that Jurgen Klopp is willing to offer him at Anfield.
Oxlade-Chamberlain underwent a medical at St George's Park where he was training with England for their upcoming World Cup qualifying double-header against Malta and Slovakia. He becomes the Reds' fourth signing following the arrivals of Mohamed Salah, Dominic Solanke and Andrew Robertson. Liverpool have also agreed a deal for Red Bull Leipzig's Naby Keita, but the midfielder will only join the club next summer.
Arsene Wenger was keen to hold on to the former Southampton starlet and even earmarked him as one to look out for in the coming seasons. But after he made it clear that he was not willing to extend his deal, the Arsenal hierarchy made the decision to offload the midfielder in order to avoid losing him on a free transfer next summer.
Oxlade-Chamberlain has expressed delight after completing his move to Liverpool, but refused to add more as he wants to focus on England's upcoming World Cup qualifying clashes. His first interview will be available on the Reds' official channel.
"I'm currently away with England, so I'm at St George's Park. 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," Oxlade-Chamberlain was quoted as saying on Liverpool's official site.
"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," the England international added.
According to the London Evening Standard, the north London club are not planning to bring in a direct replacement for Oxlade-Chamberlain and will promote from within the club. Reiss Nelson has been tipped to take the spot vacated by the Liverpool-bound star after impressing during Arsenal's pre-season tour games in Australia and China.
The 17-year-old was also involved in the Emirates Cup games against Benfica and Sevilla and a recent report suggested that he had been promoted to the first-team after winning heavy praise from Wenger. The promotion is expected to happen in the near future and he is likely to get a run in the club's EFL Cup and Europa League campaign.