The 20-year-old was targeted by Championship sides including Middlesbrough, Derby and Aston Villa but has opted to move to Craven Cottage.
Ojo, part of England’s Under-20 World Cup winning-team this summer, made two first-team appearances for Liverpool last season, both in the FA Cup, but struggled with a stress fracture in his back last season.
Cottagers boss Slavisa Jokanovic has been eager to add to a squad that has had to settle for draws in each of its first two matches of the season but is expecting to be in contention for promotion come the end of the season.
“I will fight to bring in players, as people know we need to add some players to be strong in the Championship, as it's a long season,” Jokanovic said last week.
In 2011 Ojo became the most expensive 14-year-old in English football when he joined Liverpool from MK Dons for £2million.
