Woodburn, 21, has won 10 caps for his country and spent last season on a season-long deal at Oxford United.
In November 2016, he became Liverpool's youngest goalscorer but has not played for the first team since May 2018.
"In coming through the academy at Liverpool, he has gone on to play for the first team and gained full international caps for Wales.
"I know the quality he can bring to the team, having worked with him previously. I am delighted to welcome him to Blackpool and to be working with him once again."
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