The Cameroon international's current contract at the German club comes to an end in the summer and he will move to Anfield on a free transfer.
The 24-year-old German-born player, who can operate as a midfielder as well as at centre-back and has 27 Cameroon caps, came through Schalke's youth set-up.
He made his Bundesliga debut at the age of 18, playing as a midfielder and scoring in a 1-1 draw with Bayern Munich in November 2009, and has over 200 senior club appearances to his name.
The Reds' interest in Matip has been known since January, when it had appeared at least two French clubs were ahead of them in the running, while Schalke had also not given up hope he would sign a new deal with them.
The move going ahead will see Matip follow Serbian midfielder Marko Grujic - Jurgen Klopp's first signing as Liverpool manager - in joining the Merseyside outfit this summer.
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