The Portugal international, 23, joins in a five-year deal potentially worth £45million.
Jota, who scored 16 times for Wanderers last term – including two Europa League hat-tricks – has signed a five-year deal at Anfield.
The Reds moved swiftly to land Jota, who recently scored his first goal for his country, after deciding to move for him rather than Watford’s Ismaila Sarr.
Jurgen Klopp and the club’s analytics department have been impressed by the all-action forward.
He is seen as ideal backup to Sadio Mane, Roberto Firmino and Mohamed Salah, capable of covering all three attacking positions, while having room to grow and take his game to the next level on Merseyside.
Jota joins Liverpool for an initial £41million fee, with an extra £4million in variables.
But Liverpool will pay just £4.1million this summer, after agreeing terms on a deal with Wolves that sees them buy now but effectively pay later.
Wolves happiness to structure the deal in such a manner is one of the key facets that has helped sporting director Michael Edwards get the switch over the line.
Jota departs Molineux after scoring 44 goals in 131 games, playing a major role in their promotion from the Championship and subsequent successive seventh place finishes in the Premier League.
His arrival follows the Reds’ confirmation of Thiago Alcantara’s arrival from Bayern Munich.