The 25-year-old featured just once under Jurgen Klopp this campaign, and was charged with assaulting his girlfriend earlier in January.
But he had no chance of breaking back into the first-team setup, and with the club releasing a statement condemning his actions “in the strongest possible terms,” Flanagan has since left.
He will spent the rest of the season at the Macron Stadium, vying for a place in Phil Parkinson’s back line.
Flanagan’s contract with Liverpool does not expire until the end of next term, but it is likely he will depart on a permanent basis in the summer.
His spell with Bolton could go some length to securing a long-term move, though given his failure to establish himself at Burnley last season, he is certainly against the odds.