The Brazil international will spend the 2019-20 campaign with the Bundesliga champions before a decision is made on a permanent transfer.
According to a BBC Sport report, Barcelona has said that Bayern will pay 8.5 million euros to take Coutinho on loan while the option to buy stands at 120 million euros.
"For me, this change represents a new challenge in a new country at one of Europe's best clubs. I am really looking forward to this," the 27-year-old told Bayern's official website. "I have big goals like Bayern, and I'm sure I can do it with my new teammates."
Bayern CEO Karl-Heinz Rummenigge said: "We have been working with Philippe Coutinho for some time and are very happy that we were able to realize this transfer now."
"In Philippe, a player comes to FC Bayern, who will strengthen our offensive with his creativity and excellent technique."
Coutinho went through the youth teams of the Brazilian top club Vasco da Gama. In Europe, he played for Inter Milan, Espanyol, Barcelona and Liverpool.
In January 2018, he moved from Liverpool to FC Barcelona and was the second-highest player in the world after his compatriot Neymar.
With the Catalans, he won twice in a row the Spanish Championship and 2018 the Spanish Cup competition. For the Brazilian national team, he has so far played 55 internationals (15 goals).
( With inputs from IANS )