The news will disappoint Fulham, who had been leading the chase for the 20-year-old but have lost out to the Anfield side.

Riise had agreed personal terms with Liverpool and passed a medical at Anfield on Monday.

But the deal was held up until the clubs agreed a fee for the player rated as one of Norway's brightest prospects.

Riise, who was a regular in Moncao's title wining side in 1999-2000, said: "I really want to play for Liverpool - this is a fantastic club and I think it is the perfect club for me to play for.

"They have a good manager in Gerard Houllier and all the staff I have met have been very nice.

"In Norway, Liverpool are regarded as the biggest club in Europe and I can't wait to come here.

"They have some fantastic young players like Michael Owen and Steven Gerrard and have proved several times that they can turn young players into big stars.

"I want to be a big star and a good football player."