The five-year £150m development will raise the stadium’s capacity to around 60,000, with major developments taking place to the Main Stand and Anfield Road end.
Columns in the Main Stand will be removed while the Anfield Road stand will be redeveloped allowing for a larger second tier.
The club and the city council came up with the regeneration plan after opting against building a new stadium. The scheme will see a large number of houses around the stadium demolished along Lothair, Alroy and Sybil Road.
The plan comes off the back of Liverpool City Council securing a £25m grant with a housing association to invest in the Anfield area.
“Today represents a huge step forward for the Anfield area. Everyone at the football club knows the importance of today,” said the club’s managing director Ian Ayre.
“LFC celebrated its 120th year in 2012 at Anfield and there is no doubt Anfield is the spiritual home of the club – our preference was always to remain there.”