But the move fell through when Liverpool were forced to make a public apology after being accused of making an illegal approach for the player.
Manchester City were keen on signing the 26-year-old but working with Jurgen Klopp was a key factor in Liverpool beating the Premier League champions-elect.
"Today is a proud day for me and my family as I join one of the biggest clubs in world football!" he said on Twitter.
Manchester City had opened discussions with Southampton over a move for Van Dijk, according to Sky sources, but Mauricio Pellegrino said he was unaware of the club's interest.
While Van Dijk becomes the world's most expensive defender, Neymar still holds the title of the game's costliest player after joining Paris Saint-Germain from Barcelona for 222 million euros in August.
Saints confirmed that Liverpool's offer had shattered the record, but didn't reveal the exact fee.
This news comes after the Dutch defender's omission from Southampton's last two matchday squads, amidst much speculation from both sets of supporters.
Dutchman Virgil van Dijk has joined Liverpool for a world record transfer fee for a defender.
"12 million to Southampton [was] a snip at the time!".
"I will always be indebted to the club for giving me the opportunity to play in the Premier League".
"Despite a hard last few months, I have thoroughly enjoyed my time at Saints and have made friends for life at the club". Thank you for everything!
In a statement van Dijk said he was "delighted and honored" to sign for Liverpool, accepted he had had a "difficult last few months" at Southampton.
Liverpool had expressed an interest in the player last summer and were ready to offer 60 million pounds (80.40 million USA dollars).
Rickie Lambert, Adam Lallana, Dejan Lovren, Nathaniel Clyne and Sadio Mane have all made the same switch in recent years.
This time, it was presumed this was so because the deal with Liverpool was being ironed out.