The Ivory Coast international completed his switch after signing a deal at Liverpool's Melwood training ground.
Toure is Liverpool's fourth signing of the summer, following Luis Alberto, Iago Aspas and Simon Mignolet to Anfield.
The 32-year-old said: "This means a lot to me. Firstly, I'm joining one of the best clubs in England.
"When I left City it was important for me to stay in England because it's the best league - and to join Liverpool is massive for me.
"I chose Liverpool because of the history and because of the spirit of the team and the people here."
Most of Liverpool's squad, including Toure and fellow new signings Alberto, Aspas and Mignolet, were all back at the club's Melwood training ground on Tuesday.
The only absentees were those players who have had international duty this summer, with the most high-profile of those being Luis Suarez.
His involvement with Uruguay, along with Reds team-mate Sebastian Coates, and Spain goalkeeper Jose Reina at the Confederations Cup in Brazil means they have all been given an extended break.
Suarez's future remains in doubt, however, after a series of interviews while back in South America in which the 26-year-old outlined his dislike of the British press and admitted a move to Real Madrid would appeal.
Also absent were youngsters Conor Coady, Jon Flanagan and Suso, who have been involved in the Under-20 World Cup in Turkey.
Some of the players, including the likes of Raheem Sterling, Joe Allen, Steven Gerrard - all injured towards the end of last season - and Daniel Sturridge have done some pre-preparation work at Melwood in the last week or so to help them get back up to speed.
Midfielder Jonjo Shelvey also rejoined his team-mates despite increasing speculation about his future after the 21-year-old was linked with Norwich, Crystal Palace, West Ham and Swansea.
With the arrival of Alberto and Aspas, and the return to fitness of Gerrard and Allen, there is huge competition for places in Liverpool's midfield and the club are reported to be prepared to allow Shelvey to leave.