The 20-year-old has already trained with the Hearts first-team and will go straight into John McGlynn's squad for Saturday's Scottish Communities League Cup semi-final against Inverness.
Ngoo is the second Liverpool player after Danny Wilson to sign for Hearts following the lifting of their transfer embargo.
"I'm honoured to be here. I'm delighted and happy to be at such a big team and I'm ready to go," said Ngoo, who has been allocated the No 21 shirt.
Delighted Jambos boss McGlynn added: "He'll definitely be in the squad for Saturday. He could be something that Inverness hasn't bargained for. He could be a surprise package.
"We're pleased to get Michael in. He's going to give us a few different options. He's come from a big football club, Liverpool signed him from Southend and paid a bit of money for him so they have high hopes for him.
"It probably helped that Danny is now here as he obviously knows the lad, he spoke to Michael and gave good him a good report on the football club.
"He's very similar to Danny in that he's been playing regularly. The English U21 teams didn't have much of a break over Christmas and New Year so he's been playing and he's match fit and raring to go.
"I don't want to put too much pressure on him, it's not fair to think that he's going to batter every ball that comes into the box into the back of the net. However, we hope that he's going to improve our goal scoring tally."