The 59-year-old German will succeed outgoing Sporting Director Julian Ward, who made the surprise announcement in November that he would leave Anfield at the end of 2022-23, after spending a decade at the club.
Schmadtke starts on 1 June, subject to the successful completion of work permit formalities.
Fenway Sports Group President Mike Gordon said: “I would like to welcome Jorg to Liverpool Football Club in the knowledge that he will bring a wealth of knowledge and experience into a role in which such qualities can only be beneficial both to him and us.
“Jorg will work with our football operations department as it continues to provide support for [Manager] Jürgen Klopp, in keeping with our ongoing endeavour to keep growing and developing the club in all areas.
“At the same time as we welcome Jorg, we must also bid a fond farewell to Julian Ward, who has served us with unstinting diligence, fortitude and energy in a number of roles, the most recent one being Sporting Director."
Liverpool, with the 2019-20 Premier League champions, finished fifth in the 2022-23 season and qualified for the UEFA Europa League after missing out on the top four despite a late push for Champions League football.
Schmadtke arrives following more than four years as Managing Director of Sport at VfL Wolfsburg in the Bundesliga, which came to an end in January 2023.
He had similar roles at 1.FC Köln and Hannover 96, building a reputation as one of the top decision makers in the German game in nearly 15 years at executive level.
Ward had been promoted from Technical Director in 2021, stepping up to replace Michael Edwards. He now brings to an end 11 years in various roles at Anfield.
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