A statement on Liverpool's website said the 25-year-old had signed after completing a medical and personal terms.
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Playmaker Adam joined Blackpool from Scottish club Rangers in 2009 and was instrumental in the Seasiders' promotion to the Premier League.
He was one of the club's most impressive performers last season although his goals and assists were unable to keep them up, with relegation confirmed on the last day of the season.
Adam is Liverpool manager Kenny Dalglish's second pre-season capture after he paid a reported 20 million pounds Sunderland's England under-21 midfielder Jordan Henderson last month.
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