Furness, 31, joins the Reds after almost three years with the Royals, the last few months of which were spent on loan at Tottenham Hotspur, and she will wear the No.27 shirt for LFC.
Her football career began in her home town of Sunderland where she initially spent two seasons before spells with Newcastle and Icelandic team Grindavik.
She later rejoined Sunderland for a further six seasons in 2010.
Furness said: “I’m really excited to have signed for Liverpool, it’s such a massive club and I can’t wait to get going.
“There’s such a talented squad here.