The Reds were desperate to push through a deal in time for him to be available for Wednesday's Premier League visit of Arsenal.
Caulker is expected to train with his new team-mates on Tuesday afternoon after travelling from London.
He has made just eight appearances for Southampton this season - the last of which came against Liverpool in last month's 6-1 Capital One Cup quarter-final defeat - but only one of those was a Premier League start, back in August.
On that basis his loan deal was cancelled, allowing him to make the move to Merseyside.
Liverpool's scouting department are more than familiar with the former Tottenham defender as he was a target for previous manager Brendan Rodgers.
Kolo Toure (cramp) and Mamadou Sakho (knee) both look likely to be fit to face the Gunners, so the best Caulker can hope for is a place on the bench.
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