"The immediate objective is to do the best I possibly can here.
"I’ve come here to try and secure a place for myself in the side and, if possible, stay here for many more years in the future."
Manquillo is the seventh new signing the Reds have made this summer, following on from Rickie Lambert, Adam Lallana, Emre Can, Lazar Markovic, Dejan Lovren and Divock Origi.
He was initially a part of the youth set-up at Real Madrid before moving on to Atletico seven years ago.
Manquillo made his first-team debut in 2011 in the Copa del Rey, his Primera Division bow the following year and he was involved in Atletico’s title-winning campaign last term, although his progress was disrupted by a neck injury.