The deal, one of the most significant in the league's 19-year history, was confirmed Saturday by a Galaxy official with knowledge of the negotiations. The official spoke anonymously because the team has declined to comment publicly on the matter. The move is expected to become official when the team announces it this week.
In an interview on Liverpool's in-house TV channel, Gerrard all but confirmed the deal, saying, "I'll be going to play in America."
Gerrard's contract is for 18 months — two MLS seasons — at about $6 million a season, according to media reports.
The league is said to have contributed $750,000, making it contingent to approval by the MLS Board of Governors.
With the Galaxy, Gerrard will fill the midfield playmaker spot that opened with the retirement of Landon Donovan. Both players have excelled as second strikers and attacking midfielders, making Gerrard a good fit for the Galaxy, where he'll rejoin former Liverpool teammate Robbie Keane.
Galaxy Coach and General Manager Bruce Arena began focusing on Gerrard shortly after Donovan announced in August that this season would his last.
Under MLS rules, teams can sign up to three "designated players" whose salaries do not count against the league's $3.1-million salary cap. Donovan's retirement opened up one of those spots for the Galaxy, and it also freed $8.5 million in base salary.
Gerrard was captain both at Liverpool, where he has played 17 seasons and 695 games, and with the English national team, where his 114 appearances are third-most all-time. But he announced after the World Cup that he was retiring from the national team, and he followed that Friday by saying he would leave Liverpool after this season.
"My decision is completely based on my wish to experience something different in my career and life, and I also want to make sure that I have no regrets when my playing career is eventually over," Gerrard said.
A move to Southern California makes sense for Gerrard from a personal standpoint since his wife, Alex Curran, is a model and fashion designer who could benefit from access to the entertainment industry.
Gerrard, who will turn 35 in May, has seen his playing time reduced this season in a concession to his age. However, the Galaxy appear unconcerned since players such as Keane, David Beckham, Clint Dempsey and Thierry Henry have all seen their careers reinvigorated by moves from the EPL to MLS after their 30th birthdays.
Gerrard will earn more than $13 million from Liverpool this season, but the contract the team offered him in November reportedly called for a 50% cut in pay, leaving it in line with what the Galaxy is said to be paying. That would make him the fifth-best-paid player in MLS. Former world player of the year Kaka, who will play for the expansion Orlando team, leads the list with a salary of more than $7.1 million.
Liverpool's offer was also believed to have contained an invitation for Gerrard to become a coach or team ambassador in 2017, roles he could still accept when his Galaxy deal expires in December 2016.
"It is a very special place to be part of. It is my sincere hope and wish that one day I can return to serve Liverpool again, in whatever capacity best helps the club," Gerrard said.