The 18-year-old, who joins the Reds having previously represented Imperial Academy in Nigeria, is to spend the rest of the season on loan with the second-division German side.
Liverpool paid around £400,000 for Awoniyi’s services, according to the Press Association.
“I’ll try to develop myself very well so that when I come back to Liverpool I’ll be able to add value to the team.
“When I’m in the red shirt, I will always give my very best to make the fans happy.”
Awoniyi is a current Nigeria under-23 international. He has also played for the country at the Under-17 and Under-20 World Cups, and earned a call-up to the senior Nigeria squad in 2013.
The news of his signing comes on the same day that three players left Liverpool.