Anyone living or working in the city can be tested regularly from Friday, even if they have no symptoms.
The provision of around half a million new, rapid turnaround tests is happening at the request of and in close collaboration with local leaders, the Department of Health and Social Care said.
The aim is to find asymptomatic cases in order to help prevent and reduce transmission in the community.
Liverpool recorded 366.4 coronavirus cases per 100,000 people for the seven days to October 29.
Testing will be carried out using a combination of existing swab tests, as well as new rapid turnaround lateral flow tests and around 2,000 military personnel will be on hand to help with planning logistics locally, and delivering the extra capacity.
There will also be Lamp (loop-mediated isothermal amplification) technology deployed in Liverpool University Hospitals NHS Foundation Trust for NHS staff, promising to deliver significant volumes of tests.
The department said the pilot will help to "inform a blueprint for how mass testing can be achieved and how fast and reliable Covid-19 testing can be delivered at scale".
Testing will be carried out in new and existing sites across the city, including in hospitals, care home settings, schools, universities, workplaces and using at-home kits.
People can book a test online, by walk-up, or by invitation from the local authority and Health Secretary Matt Hancock urged people to "play their part" by getting a test.
The Prime Minister thanked local leaders for volunteering to be part of the first city-wide population testing pilot.
Mr Johnson said: "These tests will help identify the many thousands of people in the city who don't have symptoms but can still infect others without knowing.
"Dependent on their success in Liverpool, we will aim to distribute millions of these new rapid tests between now and Christmas and empower local communities to use them to drive down transmission in their areas.
"It is early days, but this kind of mass testing has the potential to be a powerful new weapon in our fight against Covid-19."
Also thanking local leaders, Mr Hancock said: "Using half a million of the very latest rapid tests, this rollout can help suppress the virus and give residents and workers some peace of mind.
"Everyone in Liverpool can help play their part by getting a test and following the rules, including the critical basics of hands, space, face."
Mayor of Liverpool Joe Anderson said: "We are pleased that our numerous conversations have resulted in Liverpool becoming a pilot for mass testing, which will help to quickly identify people who have the virus and reduce transmission substantially."
Interim executive chair of the National Institute for Health Protection Baroness Dido Harding said the pilot is a "really important step forward".
She said: "By everyone in Liverpool coming forward to get tested, and isolating if they need to, we have a real opportunity to make a massive difference."