Daniel Farke's men confirmed the deal on Monday, with the newly promoted side retaining the option to buy for a reported £12million (€14m) at the end of the 2021-2022 campaign.
The 21-year-old becomes another name on Norwich's growing list of acquisitions as they seek to retain their Premier League status.
Kabak spent the second half of the last campaign at Liverpool amid their shortage of centre-backs, appearing 13 times in all competitions.
The Turkey defender, who made the final squad for Euro 2020 in June, ranked third among Jurgen Klopp's defenders to play more than 10 games for passing accuracy, completing 87.5 per cent.
The Schalke loanee also sat third among club charts for blocks (seven) and fourth for tackles (25).
Upon joining Norwich on loan, Kabak told the club's official website: "I'm very happy to be a part of this family. I'm looking forward to playing in front of the fans and getting some points.
"I spoke with the head coach and I’m really impressed by his project and what he said to me. I believe in him and his project.
"I played in the Premier League last year and I really enjoyed it. So, I want to play again and that's why I’m here. I want to play in the Premier League and to give something to the team.
"I'm looking forward to playing in front of the fans with this jersey. We will work hard to get some wins and take some points to make our fans happy."