Jota claimed the move to Anfield was too good an opportunity to turn down.
Given his energetic pressing style, Jota appears to be a good fit within Liverpool's attacking line-up, although it is expected that he will initially have to settle for a back-up role with the Reds deadly triumvirate of Mohamed Salah, Roberto Firmino and Sadio Mane seemingly unmovable.
The Liverpool manager stressed the importance of the options the new arrival gives the club.
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Jota is Liverpool's third signing this summer, following Spanish midfielder Thiago Alcantara and Greek defender Kostas Tsimikas.
"Not only as a prospect, he can also give solutions (now) to us as he's a versatile player who can go inside our shape", said the Wolves chief.
No, because the 23-year-old failed to bid farewell to the Wolves.
"I think Diogo is going to the right place and we wish him all the best, knowing that it never be forgotten, especially by our fans, all the memorable moments that Diogo provided". "He has the speed, he can combine, can defend, can press".
Liverpool will pay as little as 10 per cent of the initial figure over the next 12 months, with some of the cost also offset by Ki-Jana Hoever's £10m ($13m) move the other way. Players that join us really want to play and progress with us, not looking for the next move. "And it's up to us to take the best out of him".
Wolves chairman Jeff Shi said: "Ki is a young player who can play both centre-back and right-back, with high potential to become a top footballer".