The 19-year-old midfielder could have stayed at Anfield, but the pursuit of first team football was an important factor behind his decision to leave and Swansea have moved fast to sign him to a two-year deal that promises to keep him at the Liberty Stadium until 2020.
Dhanda did not make a senior appearance for Liverpool during his time with the club, but impressed at Under-23 level in Premier League 2 last season.
"I am really happy to be here," he told SwanseaCity.com. "I was excited from the minute I knew Swansea were interested in signing me. I just wanted to get the deal done.
“I wasn't really getting a chance at Liverpool and I wanted to come somewhere where I hope I will have a better chance to play in the first team. I want to show what I can do.
"Once I knew Swansea were interested, I felt the club would suit me. I have watched the football they have played over the years and I hope coming here will bring out the best in me.
"I could have stayed at Liverpool but I think coming to Swansea is the best thing for me."
Swansea's relegation marks a return to the Championship for the first time since 2011.
Next on the agenda is complete the hiring of a new manager to replace Carlos Carvalhal, with Graham Potter expected to arrive make the switch from Östersund in Sweden.