Liverpool have signed Joe Cole on a four-year deal - subject to a medical - following his release by Chelsea.
The 28-year-old England midfielder left Stamford Bridge in June after failing to agree a new contract with the Premier League champions.
He was linked to Arsenal and Tottenham but has opted for Liverpool, who failed to qualify for the Champions League.
Cole's arrival follows winger Yossi Benayoun's move from Anfield to Chelsea for an undisclosed fee in July.
The West Ham academy graduate becomes Liverpool's second summer signing after Serbia forward Milan Jovanovic arrived on a three-year contract from Standard Liege.
Cole joined Chelsea from West Ham for £6.6m in 2003 and scored 40 goals in 282 appearances, winning three Premier League titles and two FA Cups.
In June he claimed unspecified "political rather than footballing reasons" had led to his departure, but he insisted manager Carlo Ancelotti was not the cause of those problems.
"It is not financial and it is nothing to do with Carlo," Cole said at the time. "I love Carlo. I think he is a top guy and a top manager.
"I loved my time at Chelsea, I love the fans but it is a story for another day and I will tell it but now is not the time."
After recovering from 10 months out with a ruptured cruciate ligament, Cole grew frustrated at having to settle for a bit-part role in his final season at the club.
He was used mainly as a substitute and, when he did play, Ancelotti often deployed him in a wide position.
Cole, capped 56 times by his country, featured in two of England's matches at the 2010 World Cup, though on both occasions he was introduced as a second-half substitute.
"Next season I want to have a fantastic season for England and whatever club I am at. The next contract will be a footballing decision," he added earlier in June.
"I want to play in a more central position and I want a manager who has faith in me."
Tottenham boss Harry Redknapp, who nurtured Cole's early career at West Ham, had talked of his desire to take the midfielder to White Hart Lane.
Spurs finished fourth in the Premier League last season to earn a Champions League qualifying spot while Arsenal, also admirers of Cole, would have offered guaranteed Champions League football.
But he opted for Liverpool and new Reds manager Roy Hodgson will hope to bolster his squad further with a new left-back following the departures of Fabio Aurelio and Emiliano Insua.
Hodgson is also hoping to retain the services of captain Steven Gerrard and star striker Fernando Torres, both of whom have been linked with moves away from Anfield.
And former Liverpool defender Alan Kennedy believes Cole's arrival could go some way to persuading the duo to stay.
"I'm delighted for the club," Kennedy told BBC Sport. "Roy Hodgson has persuaded one of the best English players in the game to come in and that will only be good news for the club and for the players the club are looking to hold on to.
"I'm sure Roy and Liverpool can get the best out of Joe again, and hopefully it will result in the club pushing back up the league and targeting silverware again.
"I've been an admirer of Joe's for the last few years. He is a player that excites fans and he is a player that we desperately needed.
"We know Joe had a lot of options, especially from London, but he's looked at Liverpool and maybe thought to himself that he is the guy who can resurrect the club after what was a terrible season last year.
"Credit for that has to go to Roy Hodgson, I believe - he is a very persuasive man and a man well respected in football, so that's fantastic news."
Another former Red, Ian Rush, believes the signing underlines Liverpool's ability to still compete for the best players in the world despite not being able to offer Champions League football.
"Liverpool might not have been successful as we would have liked to have been recently but this shows we can still attract top name players, whether that's an England international or a foreign international," said the Welshman.
"This is the signing supporters wanted and it's a big boost for them.
"You look at last season when we went into it not hoping but thinking we were going to win the league. This season people are thinking, 'Are we going to finish in the top four?'
"I think this sends a sign out to Liverpool supporters that the club do mean business."
Source: BBC Sports
[Official] Liverpool sign Joe Cole
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