Kabak spent the second half of the 2020/21 campaign on loan at Liverpool where he made 13 appearances across all competitions.
At the end of that season, Jurgen Klopp's side had the opportunity to make the move permanent for a reported fee of £18million. However, the Reds declined the offer as the German manager didn't see the defender as a long-term option.
The 22-year-old spent last season on loan at Norwich City where he made 12 appearances, including 11 in the Premier League, as the Canaries endured relegation.
Kabak returned to parent club Schalke in the summer, but has now completed his move to Hoffenheim, signing a four-year deal with the club.
After completing his transfer, the player said: "I'm very happy about my move to TSG.
"Hoffenheim is one of the most exciting clubs in Germany and enjoys an excellent reputation - especially for successfully developing young players.
"I'm excited about the team, working with the new coaching team and I'm happy to be able to start here right away."
Hoffenheim director Alexander Rosen added: "Ozan is a powerful defender who impresses with a strong and energetic duel.
"In addition, he is fast and has an excellent header game, which makes him extremely dangerous even with his own standards.
"Despite his young age, Ozan has already experienced some ups and downs that have allowed him to mature into a mature personality."