The Serbian midfielder has signed a three-and-a-half-year deal with the Eagles.
Reports suggest that Palace have paid the Greek giants £11million for 25-year-old Milivojevic.
Palace boss Sam Allardyce told the club's official website:
"I am delighted to bring Luka to the club.
"He has experience in UEFA Champions League and International football and will add a new dimension to our midfield.
"He is a talented two footed player with intelligent passing ability as well as being very strong defensively, in and out of possession."