The German club have signed the 20-year-old on a season-long deal after he struggled to get gametime for much of last season, starting only four league matches and none after October.
With Liverpool only in the Europa League next season, Carvalho’s move does give him the opportunity to impress in the Champions League as part of what he’s called a “perfect” switch for him at this stage of his career.
“As a young player, it’s a big step for me to move from England to the Bundesliga and RB Leipzig,” he told the club website.
“I’m joining a strong side, one that has been very successful in recent years. Now, I want to help build on this and am looking forward to taking on a new challenge.
“My goal is to play as much as possible, in the league, the cup and especially in the Champions League.
“RB Leipzig have a reputation for giving young players these kinds of opportunities, which is why this is the perfect club for me to continue my development at.”
Carvalho’s departure could pave the way for Dominik Szoboszlai to head in the opposite direction, with the Leipzig winger also wanted by Newcastle.
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The Bundesliga side’s £60million release clause for the Hungarian expires on Friday night, the same day as Carvalho’s arrival was confirmed.
Leipzig director of sport Max Eberl said: “Fabio Carvalho is a huge talent – the fact that Liverpool signed him recently just proves that. He is quick, agile, full of tricks and creative. He likes to get shots away and can also set his teammates up.
“We will give Fabio the time he needs to settle in here and to adjust to life in a new country and with a new club. We are looking forward to him improving our attacking game and to have another option in this department.”