He has 4 full global caps for Wales, and has represented them at all youth age groups.
Leicester boss Claude Puel added: "I'm very happy to welcome Danny to Leicester City Football Club".
Another Liverpool player - Wales winger Harry Wilson - had been earmarked as a potential loan target, but a chase that involved most of the Championship officially ended earlier this week as the 21-year-old joined Derby for the season.
Now, former Liverpool midfielder and manager Graeme Souness has told Sky Sports that he thinks Klopp is making the right decision by replacing Karius, as he simply can't be trusted anymore after a series of mistakes, backing the move for Alisson as a "top goalkeeper".
He now moves to fellow Premier League side Leicester City for a £12.5M fee.
Starting his career at Wrexham AFC, Ward signed for Liverpool all the way back in 2012; however, he only made three appearances for the club, having had loan spells at Morecambe, Aberdeen and Huddersfield Town.
Ward insists he is now looking to kick on at the King Power Stadium and also taste success during his time at the club.
Ward will join the team on Monday for a training camp in Austria.
Liverpool and Wales forward Ben Woodburn is set to travel with Liverpool for their pre-season tour to the United States of America, despite loan interest that includes Norwich City.