The former Reds and England forward, 39, scored 183 goals in 369 appearances across two spells with the Anfield club.
He will now fill a variety of ambassadorial roles, including work at Liverpool's Academy.
He said: "Liverpool has been a massive part of my life for 30 years now.
"It's been an honour to play for this club and it's even more of a privilege to be asked to be an ambassador.
"I'm looking forward to representing this great club and will do all I can to support success both on and off the pitch."
Fowler will kick off his ambassadorial responsibilities by joining the first team on their pre-season tour to the United States, featuring fixtures in Boston, Chicago, New York and Charlotte.
Probably the only one thing about Liverpool, I have ever really liked. In his day, he was pure class, a real natural finisher. Great to see 'Big Bum' is back !- wotyomamased