The Cameroon international, who has 27 caps and has featured at the last two World Cups for his country, had long been linked with a switch to Anfield, with some suggestions that he could become a January transfer window target because of the Reds' extensive injury crisis.
Despite the Bundesliga outfit's attempts to keep him at the Veltins-Arena, offering a new contract which reportedly doubled his wages, Matip has decided to move to England when his current contract expires in July.
Reds fend off clubs from home and abroad for Matip's signature
Liverpool had to beat a number of clubs to the player's signature, with the likes of Premier League strugglers Newcastle United and Sunderland reported to have shown interest, but the 6ft 4ins defender will officially join the ranks at the end of the current campaign.
Having been an ever-present in a strong Schalke side, Matip has an abundance of experience in one of Europe's best leagues and adds much-needed height which has faltered time-and-time again at set-pieces this season.
Schalke had been keen to keep a hold of the player, who can also play in midfield, having seen him make almost 250 appearances - averaging a goal every 10 games for the Royal Blues.
He made his debut for the club in 2009 at the age of 18 after coming through their Academy since joining in 2000, scoring an equaliser against Bayern Munich, then managed by now Manchester United boss Louis van Gaal.
Defender keen on new experience of Premier League
Matip, speaking to Schalke TV, explained that his decision is in order "to experience something completely new" which he said was the "only one reason" he would ever leave the Gelsenkirchen club.
He said that he would "never [have] considered a move to another Bundesliga club" and admitted although the decision "wasn't easy" this is "the right moment" for him "to take the next step" in his career, saying that he's moving to "a traditional club in a superb league."
Matip is expected to sign a four-year deal upon his move to Liverpool and Schalke's sporting director Horst Heldt added that the club and the player held "extensive discussions" since May but said that due to "certain decisive factors" it "became clear very quickly" that he had made his mind up.
Heldt joked that they "can't move Schalke into the Premier League" insisting that "otherwise I think he'd probably have renewed his contract with us" and described Matip's decision as "about learning something new, maybe re-defining himself."
Matip becomes Klopp's third signing as boss
The 24-year-old will become Jürgen Klopp's second permanent signing as Liverpool manager, with Marko Grujić also moving to Merseyside in the summer, having returned to Red Star Belgrade for the rest of this season after putting pen-to-paper on a £5.1 million move in January.
The 34-year-old, who turns 35 next month, has just a few months left on his deal and despite scoring his first goal since joining Liverpool in 2013 in their 6-0 away win at Aston Villa on Sunday, could be released after slipping further down the pecking order.