The Spaniard enjoyed a successful spell at Anfield with Carragher as a team-mate, scoring 81 goals in 142 games for the club from 2007-11.
But his form fell off a cliff after Chelsea broke the British transfer record to bring him to Stamford Bridge on deadline day.
Carragher insists that the striker’s struggles came as no surprise to him after spotting that he was already past his best before the move.
“We didn't want to stop Torres signing for Chelsea,” he told Sky Sports.
“His time was done - £50m was more than enough, we couldn't believe it. I was shocked by the money they paid.
“I knew he'd wanted to go from the summer: he hadn't had a great 18 months, he went in the January, but his one good game that season was against Chelsea at Anfield when we beat them 2-0 and he scored both.”
Torres made his debut for Chelsea less than a week later against the team he had just left, as the Blues fell to a 1-0 defeat to Liverpool in London.
Looking back on the game, Carragher said: “We knew he wasn't the Torres when he'd first arrived.
“I thought it was a mistake by Carlo Ancelotti to play him in that game. He'd just signed, it's against Liverpool.
“It's a big game, I didn't feel sorry for him but to go in against your old club, getting a lot of stick, I think it affected him for his whole time at Chelsea.”
Liverpool infamously spent £35m of the Torres sale on Andy Carroll from Newcastle that same month, although Kenny Dalglish's side did also recruit Ajax's Luis Suarez for £22.8m mere hours earlier.
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