The 22-year-old transfers from the Premier League champions for a fee of €10 million (£8.7 million).
"Olympique Lyonnais confirm the signing of midfielder Tyler Morton from Liverpool. The English youth international has committed to a five-year contract, which lasts until June 30, 2030," Lyon stated in a release on the club's website.
Morton entered Liverpool's academy at the age of seven and secured his first professional contract with the Reds at 17.
He made 14 appearances for the senior team and had two loan spells in the English second tier - at Blackburn and Hull.
Having been capped 13 times at the under-21 level for England, Morton played a crucial role as the team became European champions in June.
The defensive midfielder assisted in scoring the winning goal in the final against Germany with a precise cross to the head of Jonathan Rowe.
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