Coady, 20 will become Blades boss David Weirs sixth signing since he took charge of the club last month and hopes to develop the England U-20 captain during his 6 month loan spell at Bramall Lane.
"I've been aware of Conor's talents for a long-time, through his development with Liverpool and England and he is a great prospect," manager David Weir told sufc.co.uk. "He will add competition for places in the midfield and will be an asset for us."