The 23-year-old has signed a contract until the summer of 2028 and comes in to boost a Liverpool attack that is missing Diogo Jota and Luis Diaz due to injuries.
PSV announced earlier this week that they had reached an agreement with Jurgen Klopp's side for Gakpo's transfer.
The Dutchman was heavily linked with Manchester United during the summer transfer window.
Gakpo enhanced his status as one of Europe's best young players with an impressive display at the Qatar 2022 FIFA World Cup.
He scored three goals for Netherlands in Qatar as Louis Van Gaal's side reached the quarterfinals before losing to Argentina.
Gakpo has been handed the number 18 jersey at Liverpool.
“I feel really good, I'm really excited to be here," Gakpo said in a club statement.
"I'm looking forward to start training and start playing for this amazing club.
“I think this is a great club for me to come in and try to show what I can [do] and try to help the team to achieve more beautiful moments that they already did in the past years.
“I think for me personally it's also good to develop here and there's a lot of great players here [who] I can learn a lot of things from.”
Klopp added: "It really is great news for us that we have been able to do it.
"The work that has gone into this has been really impressive and in the end, we have managed to sign a player who we have known about for quite some time and who we believe will have a bright future with us.
"There is a lot to like about Cody. He is still only 23 years old, but he already has a lot of experience.
"We know he is a smart footballer and a smart person, so we are excited to be able to work with him."
Gakpo has made 24 appearances across all competitions for PSV this season, scoring 13 goals and providing 17 assists.
