The Reds had a £110m offer for Isak rejected in August and since then the 25-year-old has not trained with or played for Newcastle, but in the final hours of the transfer window a deal has been reached to end the impasse.
Alexander Isak is now a Liverpool player
Arne Slot impressed by Liverpool’s mentality in win over Arsenal
The striker arrived at Anfield to undergo a medical on Monday, with Newcastle relenting by accepting the player does not want to play for them any longer. United also announced the signing of striker Nick Woltemade on Saturday.
Isak was left out of Newcastle’s pre-season tour of Asia with what was said to be a thigh injury, but has been absent from the squad ever since and at one stage was training alone at former club Real Sociedad.
He has accused the club of breaking a commitment that he could leave if a suitable offer came from a big club – though that now looks to have changed, with a £5m loyalty payment taking the deal up to as high as £130m.
Isak said: “I feel amazing. It’s been a long journey to get here. But I’m super-happy to be a part of this team, this club and everything it stands for. It’s something I’m proud of and I’m really looking forward to it.
“I’m just happy it’s done and that I can get back to work. I’m looking forward to seeing my teammates and the fans, and getting back out there.
“I think I have a lot to give, I think I have a lot to improve. I’m a striker but I always want to give as much as possible to the team, mainly goals but much more than that as well.
“I want to win everything. Yeah, [as simple as that].”
He becomes Liverpool’s eighth first-team signing of the summer, marking the second time they have broken their own transfer record following the £110m capture of Florian Wirtz from Bayer Leverkusen.
However, Palace withdrew from the Guehi deal after they failed to sign their preferred replacement when Igor Julio decided to join West Ham instead of Palace.
While Palace did buy another centre-back, in Jaydee Canvot, the 19-year-old was not considered ready to step in for Guehi straight away.
It means Palace risk losing Guehi on a free transfer next summer, when his contract expires, and Liverpool are frustrated by their inability to sign a player who has been a target for them all summer.
Arne Slot still has four specialist centre-backs for the campaign, including a new signing, in Geovanni Leoni, as well as captain Virgil van Dijk, Ibrahima Konate and Joe Gomez.
Liverpool had rebuffed interest in Gomez from Palace, as well as AC Milan and Brighton, and their longest-serving player was never likely to leave this window.
For Guehi, it is a third successive transfer window when he has stayed at Selhurst Park despite a late bid. Newcastle submitted a fourth offer for him last summer while Tottenham attempted to bring him in during the winter window.
Manager Oliver Glasner had said he wanted to keep his captain but Palace, who could have almost doubled their money on an £18m signing, may now see him depart without them recouping a fee.