The 23-year-old has been sent to Huddersfield on a season-long loan move after he signed a new long-term contract with the Merseyside club and Wagner admits he is delighted to have such a player at his disposal.
"I've spoken before about using the loan market to bring special talent to the club and Danny is another great example of this," Jurgen Klopp's former Borussia Dortmund assistant said on his club's official website.
"Danny is a goalkeeper that Liverpool rate very highly, which is why he has signed a new long-term contract at the club. He did very well out on loan last season and I believe we can help him take the next step in his career this season, so he will return to Liverpool a better goalkeeper.
"He is good with the ball at his feet, which is important in our style, but most importantly he is excellent at keeping the ball out of his net.
"Danny has had a very busy season that was extended by the part he played for Wales in Euro 2016, so he will be given some time off before he joins the squad when we depart for Austria towards the end of the month."