Liverpool have signed winger Luis Diaz from Porto for an initial fee of £37m.
The 25-year-old has signed a five-and-a-half-year contract with the Premier League side and will wear the number 23 shirt.
The fee for Diaz could rise to as much as £49m if potential add-ons are triggered during his time at Anfield.
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The Colombia international was a top target for manager Jurgen Klopp in the summer, but interest from Tottenham this month accelerated their plans.
Spurs wanted to sign Diaz during the current window and were willing to pay up to £46m, but the winger preferred a move to Liverpool.
"He's an outstanding player and someone we've been tracking for a very long time," Klopp told Liverpool's official website.
"We believe he has everything needed to fit into our way and adapt to the Premier League, both physically and mentally.
"He's a player who is hungry for success and knows you have to fight to get what you want. He is a fighter, no doubt. He's a skillful team player who has always the goal in mind.
"This team deserved to add quality and when we played against Luis earlier this season, we saw what a danger he is, how fast he is and how his mentality was to help his team.
"Luis is a player we believe will make us better now and in the future. He's the player we really wanted and they've (the owners) made it happen, so I'm very happy."
Liverpool's No 23 shirt and its legendary owners
Luis Diaz will be among good company when he pulls on his new No 23 shirt for the first time. The number was assigned to Liverpool legends Jamie Carragher and Robbie Fowler during their time at Anfield, while Emre Can and Xherdan Shaqiri are more recent recipients of the honour.
Diaz underwent a medical in Argentina as he is on international duty with Colombia for their World Cup qualifiers.
He played in both of Porto's matches against Liverpool in the Champions League this season, but was unable to help them avoid a 5-1 home defeat in September or a 2-0 loss at Anfield in November.
The deal represents a big coup for Julian Ward, who is set to succeed Liverpool sporting director Michael Edwards in the summer, as he took the reins in negotiations.
Diaz requires a work permit to enter the UK, meaning he is unlikely to arrive in Liverpool until the end of next week at the earliest.
Liverpool's next match is at home to Cardiff in the FA Cup on Sunday, February 6.
Analysis: Liverpool rebuilding their attack
Sky Sports' Adam Bate:
While Sadio Mane and Mohamed Salah are away at the Africa Cup of Nations, Liverpool have acted to future-proof their forward line. Roberto Firmino turned 30 in October, while Mane and Salah will both do so later this year. The trio are legendary figures at the club but the balance of the attack needs to shift.
The arrival of Diogo Jota, 25, helped to freshen things up, taking minutes from Firmino this season. Luis Diaz could mean the same for Mane as he too operates in that left channel. The Senegal international scored against Chelsea recently but had gone nine games without a goal before that.
Liverpool faced a big challenge in transitioning away from the team that delivered the Champions League trophy and the Premier League title. Diaz can help. He is coming into his peak years and appears an astute signing, a player with an appetite to prove himself in the Premier League.
If the signing proves successful, and the transition seamless, Liverpool will believe they are building that new forward line for the future. Perhaps Jurgen Klopp's next great team is being constructed.
'Diaz will fit in perfectly at Liverpool'
Portuguese football expert Filipe Dias on Transfer Talk:
"Luis Diaz, the best player in the Portuguese league, is going to be joining Liverpool.
"He is the kind of player Klopp likes. Technically he is very gifted - he is bound for greater things than the Portuguese league.
"Diaz is the best Colombian player at the moment, the best player in Portugal at the moment. He can do anything up front despite not being a centre forward.
"He really has something special about him. There is no doubt in my mind that, if things go normally, he will fit in perfectly at Liverpool."
What will Diaz bring to Liverpool?
Sky Sports' Adam Smith:
A quick glance at his headline stats in the Portuguese Primeira Liga this season suggests the 25-year-old provides a serious goal threat - but also offers so much more.
The winger ranks top for goals, shots and touches in the opposition box and is among the elite for winning back possession in the final third, creating chances, attempting fast breaks, aerials, dribbling and passes in the attacking third.
The maps below narrow down his goal threat to Champions League appearances over the past two seasons and reveal Diaz is most potent from his favoured left channel, frequently carving chances for team-mates with diagonals into the box.
Besides scoring goals, his most striking attribute is participation in overall play, with above-average numbers for passes in the final third - but the graphic below suggests Diaz also frequently tracks back to support the team.
When visualising his goal and passing averages, Diaz emerges among an elite crop of players in Europe's top leagues, with returns on par with Karim Benzema and Mohamed Salah.
His heat map below emphasises his work-rate with concentrations of activity in his defensive half, while his ability to reclaim possession high up the pitch would certainly suit a high-press style.
Liverpool interested in Fulham's Carvalho
After securing the arrival of Diaz, Liverpool have now turned their attention to signing Fulham's attacking midfielder Fabio Carvalho.
Carvalho has just six months remaining on his contract at Craven Cottage, with the Reds one of a number of clubs interested in the 19-year-old.
One source has told Sky Sports News Liverpool have submitted a £5m bid for the youngster - although this has not been confirmed by either club.
Fulham are confident Carvalho will be their player until the end of the season, although it is believed Liverpool want to get a deal done for the player before Monday's deadline.
However, if it does not happen by then, it is unlikely to happen at all as Liverpool do not want to go to tribunal, with the Reds instead preferring to loan Carvalho back to Fulham for the rest of the season.
Carvalho made his first-team debut for Fulham last season and has gone on to establish himself this campaign with seven goals and four assists in 19 appearances.
Speaking earlier this week, Fulham boss Marco Silva insisted Carvalho would not leave the club this month, despite it potentially being the final opportunity to receive a transfer fee for him.
"Fabio will be with us until the end of the season," Silva. "I would like to see him here for more years.
"From day one I have been trying to keep him. It is not a surprise that clubs are interested in Fabio. We are talking about a young player with big talent.
"The situation is not easy because he is in the last year of his contract, but that is the reality. It is out of our plans for him to leave the club in this window.
"It has been difficult for us to renew with him, but we are trying.
"It is always difficult with a player of this talent - even with a contract it is difficult to keep him, and without it is even worse. But Fabio will be with us until the end of this season."
Analysis: Ball is now in Fulham's court
Sky Sports' Richard Morgan:
It is not hard to see why Liverpool are interested in signing Carvalho, who at just 19 and as a versatile forward who likes to operate on the lefthand side of a front three, would tick a lot of boxes when it comes to the profile of an attacking player Jurgen Klopp likes to sign.
Not only that, but having been in the UK since moving here from Portugal aged 11, Carvalho also qualifies as a homegrown player, an added attraction for Liverpool.
However, whether Fulham would be willing to sell someone who has been so integral to their push to get back in the Premier League this season is open to question, even if the west London club would get more for the England U18 international in January than if they wait till the summer when his contract at Craven Cottage runs out.
In that scenario, as was also the case when Harvey Elliott left Fulham for Liverpool in July 2019, Fulham would only get a compensation fee - decided by a tribunal - for Carvalho.
So do Fulham opt to cash in on their star man now - clubs in Spain are also reportedly keen on the youngster, although the compensation fee the Cottagers would get from La Liga clubs is far lower than if they sold to a Premier League side - but risk hindering their chances of a top-flight return?
Or do they hold on to him until the end of the season in the hope Carvalho can help them hold on to top spot in the Championship, when the financial riches they would receive would negate any reduction in the forward's transfer fee?
Bournemouth want Williams on loan
Meanwhile, Bournemouth have expressed an interest in taking Liverpool right-back Neco Williams on loan until the end of the season.
Liverpool are understood to be weighing up the Championship club's interest in their Wales international.
Williams, 20, is pushing for the chance for regular first-team football as he wants to play for Wales in their World Cup qualifiers in March.
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