While a fee has not been mentioned in the official announcement, The Telegraph reports a €50 million fee, which would be fair by the current standards of the transfer market, considering Fabinho's age - 24.
Liverpool reportedly remain interested in Monaco midfielder Thomas Lemar as well as Lyon captain Nabil Fekir.
Fabinho, a Ligue 1 victor and Champions League semifinalist with Monaco two seasons ago, said his compatriot Firmino had also played a part in his decision.
"We spoke a bit more about how the city was, about the infrastructure of the club, the city and we also spoke about the coaches and how they do their work", Fabinho told the club's website. Hopefully, on a personal level, I'm able to win titles with this club.
And Alex Oxlade-Chamberlain faces the titanic task of reclaiming his place in the Liverpool team having picked up the fifth knee injury of his career against Roma in the Champions League semi-final.
The France global enjoyed a prolific campaign as he scored 21 times for Lyon as they finished runner-up to Paris Saint-Germain in Ligue 1.
The newspaper suggests that a deal will cost the Merseysiders around £60m and Liverpool are keen to get their latest big-money transfer wrapped-up before the World Cup begins next month.
Simon Mignolet meanwhile has not played since January and looks unlikely to be recalled to the first team. Considered a right-back in his early days, it was not until the second half of the 2014-15 season that Leonardo Jardim moved him to the defensive midfield berth - which proved to be a masterstroke.
"I've been following Liverpool for a few years, in particular since Firmino arrived", Fabinho told LFCTV.
His height and the position he plays will draw comparison with Steven Nzonzi and even compatriot Gilberto Silva.
Together with the signing of Naby Keita, who agreed on a move to Liverpool last season. He also has four caps for his national side.