Joao Teixeira has rejected a new Liverpool contract to make his 'dream' move to FC Porto.
The 23-year-old will return to his homeland on a free transfer after four years at Anfield, and has signed a deal until 2020 with the Portuguese giants with Liverpool only receiving £240,000 compensation.
Had Teixeira moved to another English club Liverpool would have been able to seek a higher fee closer to the midfielder's actual value at a tribunal but an overseas move means they are entitled to only basic compensation.
A Liverpool statement read: "The 23-year-old will officially be registered as a Porto player when his contract with Liverpool is complete on July 1 and the Reds will be entitled to a training compensation fee."
Teixeira moved to Liverpool from Sporting Lisbon in 2012, but he failed to make an impact in the first-team, and made just seven appearances for Jurgen Klopp's side last season.
With Teixeira out of contract this summer, Klopp offered him a new deal to stay with the Reds but the Portugal U21 international wanted more first-team football.
The midfielder is a boyhood Porto fan and the opportunity to join them was too big for him to turn down.
"I am very happy," Teixeira told the club's official website. "It's a dream for me to play in this great club.
"I have aspired to wear this shirt because I was used to seeing FC Porto win over the years.
"I hope everything goes well and I want to give my best."