Arthur has swapped Juventus for Liverpool in a surprising season-long loan deal on transfer deadline day as Jurgen Klopp bolstered his midfield options.
Reports suggested the deal for the 26-year-old did not include an option to buy, but Juve confirmed that there is indeed a possibility for Liverpool to make the move permanent for a fee of €37.5million (£32.3m).
Arthur spent two years at Barcelona before moving to Serie A in 2020 in a €72m deal, but he made just 11 league starts in Italy last season and has not yet featured this term.
The Brazilian had previously been linked with Everton but instead joins the Toffees' city rivals for the rest of the season.
The deal follows Juventus signing Leandro Paredes on loan from Paris Saint-Germain, and means a fringe figure can be shuffled out of Massimiliano Allegri's large squad.
Liverpool have been struggling with injuries in midfield, and Arthur, albeit no stranger to an injury himself, adds to their options in that department.
The former Gremio player is a Brazil international who will be hoping to impress at club level to earn a place in Tite's World Cup squad.
Speaking to the club's website after the announcement, Arthur, who will wear the number 29, said: "I'm really, really happy to be here wearing this great shirt with this famous badge that represents so much in world football, it's a dream.
"We talked a lot, and our ideas and visions were a good fit so I'm sure it was the right choice. I'm really happy and highly motivated to continue living my dream on the pitch and giving my all in a Liverpool shirt."
He will be expected to add bite as much as flair to the Liverpool midfield, where he will provide cover for an area where Klopp has seen several players fall to injury already this season.
Thiago Alcantara, Naby Keita and Alex Oxlade-Chamberlain remain sidelined, while Jordan Henderson came off with a hamstring issue in Wednesday's 2-1 win against Newcastle United.