In the January 2006 transfer window, Daniel Agger got his wish and was looking to join Premier League team Liverpool, then holders of the UEFA Champions League. Agger did not travel with his Brøndby teammates for their winter training camp in January and on 12 January 2006, he signed a 4½ year contract with Liverpool. The £6,000,000 transfer deal made him the most expensive footballer sold by a Danish club to a foreign club. During his first half-season at Liverpool, injuries limited Agger to four first-team appearances, and he missed the club's victory in the 2006 FA Cup Final. Agger played the full game as Liverpool won the 2006 FA Community Shield against Chelsea. Still adapting to the English game, he established himself in Liverpool's first team squad, competing with Liverpool vice-captain Jamie Carragher and former Finnish team captain Sami Hyypiä for the two starting places in the central defence. Agger scored his first goal for Liverpool on 26 August 2006 in a 2–1 win against West Ham United. Agger was allowed to run unchallenged toward the Kop-end goal and scored from 35 yards (32 m) out. Liverpool manager Rafael Benítez commented he was not surprised and that Agger has frequently scored such goals in training. The goal was named Goal of the Month for August by the BBC's Match of the Day, and later Liverpool's Premiership Goal of the Season.[11] On 4 October 2006, he was given the PFA's fan award for impressive and solid displays in September.

Agger scored his second goal for the club in a Football League Cup away game against Birmingham City with a volley from close range during the seven minutes of first-half stoppage time. His third was against Arsenal, scoring a header in a 4–1 victory played on 31 March 2007. In the first semi-final of the 2006–07 Champions League, Agger received some criticism as Liverpool lost to Chelsea 1–0, after Chelsea striker Didier Drogba managed to dribble past him before making the assist to win the game. In the second leg of the semi-finals, Agger answered his critics by scoring another curler from a smartly-taken Steven Gerrard free-kick from just outside the penalty area, and helping Liverpool keep a clean sheet as the team beat Chelsea 1–0 on 1 May 2007. He went on to play in the 2007 UEFA Champions League Final which Liverpool lost 2–1 to Milan. Agger started the 2007 pre-season scoring two goals in four games, including a left footed-finish against Hong Kong outfit South China. However, he suffered a metatarsal injury in September, again losing his place to Hyypiä. In January 2008, Agger began training and was attempting to regain match fitness, but a recurrence of the injury in his second metatarsal again ruled him out of action. After being examined by several specialists, it was reported that Agger would miss the remainder of the season to undergo surgery on his foot.

On 28 February 2010, Agger played his 100th competitive game for Liverpool, playing in the 2–1 home win against Blackburn Rovers. Agger played another 14 times in 2009–10, including scoring his seventh goal for the club, an outstanding backheel, against Benfica in the UEFA Europa League, and also helped Liverpool reach the semi finals of the same competition. On 9 August 2013, it was confirmed that Agger was to become Liverpool's vice-captain, replacing the retired Jamie Carragher. This came shortly after reports had surfaced that Barcelona had made a bid to sign the Dane. Agger assisted Daniel Sturridge's goal with a flick-on header in the 1–0 victory against Manchester United. Agger did however, see his game time cut short due to Mamadou Sakho being preferred in the same role. On 1 January 2014, Agger scored his first goal of the season, meeting a Philippe Coutinho corner with his head in a 2-0 win over Hull. During much of 2014, Agger was left out of the team, with Sakho partnering Skrtel in defence. Agger was restored to the starting line up on 11 May 2014 in Liverpool's end-of-season match at home to Newcastle. With the Reds trailing 1-0, Agger scored the equaliser by meeting a Steven Gerrard free kick at the back post. On 30 August 2014, Liverpool confirmed that Agger had rejoined his previous club Brøndby IF on a two-year deal, which involved a considerable pay cut, for a fee of £3 million. Despite offers in England and other European countries, he wanted to play in a country with a less physically demanding league. He told Denmark's TV3 that Liverpool manager Brendan Rodgers was unappreciative of his efforts.