The news of Matip's ankle ligament damage means he joins Virgil van Dijk and Joe Gomez in playing no further part this term.
With makeshift centre-back Fabinho currently sidelined too, Reds boss Jurgen Klopp was forced to bolster his defence before the January window closed.
Kabak, a Turkey central defender, joined on loan until the end of the season, with the Premier League champions paying an initial £1m loan fee.
They have the option to buy the 20-year-old for £18m at the end of the season.
Liverpool’s research included a glowing reference from former Huddersfield boss David Wagner, close friend of Klopp and the former Schalke manager, who worked with Kabak for more than a year.
“Yes, Dave was very, very positive about him,” Klopp told Liverpoolfc.com. “He came very young to Germany and everybody was clear he was a massive talent.
“He’s really a big talent and we are really looking forward to working with him. Dave always said he will be a future captain of a team. He is a proper personality.
“He could have gone anywhere but he wanted to make football steps and we are a proper football step for him. He wants to learn but he can deliver already.”
Davies, 25, plans to make the most of his “surprise” opportunity after joining for an initial fee in the region of £500,000, plus structured add-ons.
Davies said: “Obviously it came as a bit of a surprise when it first came but once you start to get your head around it, the opportunity is incredible.
“I’ve never actually been to Anfield and I haven’t had a look around yet. I had a quick look out and had a look at the pitch and it looks like carpet, which obviously you’d expect.”
North End will also get the 19-year-old defender Sepp Van Den Berg on loan for free, with the first option for a loan next season should he start a certain percentage of matches in the current campaign.
Fast Results
Scores
