As reported by Goal on Thursday, the Anfield outfit made a shock move for the 32-year-old forward as they looked to supplement their first-choice attacking line of Luis Suarez and Daniel Sturridge with proven Premier League quality.
The surprising transfer was prompted after Liverpool baulked at Swansea City's £20m pricetag for Wilfried Bony, and Lambert could yet be joined by Saints team-mate Adam Lallana, the subject of a 'take it or leave it' final offer of £25m from the Reds.
Lambert was released by Liverpool as a 15-year-old back in 1997, but has since risen up from the fourth tier of English football to seal a fairy-tale return to his boyhood club, who will be playing Champions League football once again next season.
"I can't believe it," he told the club's official website. "I've loved this club all my life. I left here 17 years ago - and I haven't stopped loving it since.
"I have always dreamt of playing for Liverpool, but I did kind of think the chance of playing for them had gone. I didn't think the chance would come.
"I know how big Liverpool are - and it means everything to me - but I know what is important; I know it's what I do on the pitch and the minutes I play. I know that's what matters, and that's what I'll be focused on."
The transfer represents a significant profit on the £1m the Saints paid to Bristol Rovers to sign Lambert in 2009, a fee he quickly repaid by guiding the south coast club back to the Premier League.
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