She won the Frauen Bundesliga title at Bayern, having lifted five Scottish Women’s Premier League titles at Rangers and Glasgow City.
Kerr is the second player to sign for Liverpool on Friday, joining German goalkeeper Rafaela Borggrafe.
Borggrafe, 25, has joined Liverpool from SC Freiburg on a free transfer.
She was on the standby list for Germany’s Euro 2025 squad, and at Liverpool will compete with Rachael Laws and Faye Kirby for a starting spot.
Liverpool are currently without a manager after Matt Beard was sacked last season, with former Manchester City manager Gareth Taylor the leading contender to take over.
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