It was a huge blow for Newcastle to lose their star man, he struggled at Anfield, and Carroll's career began a rapid decline.
Liverpool paid £35million for the striker, which was then a British transfer record fee. The deal itself was completed just before the transfer market slammed shut on deadline day.
Now, then-Newcastle manager Alan Pardew has opened up on the infamous winter deal.
He told talkSPORT's January Transfer Window Show: "I lost Jermain Defoe at West Ham and Andy Carroll and Demba Ba [at Newcastle].
"Andy Carroll was the worst one because, I think the last day was on a Monday, and I was flying up from London as I'd been home to see my family.
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"I was just getting on the flight and Derek Llambias rang me and said the bid is getting really close to £30m and when you get off the other end we might be doing this deal.
"Being a football manager and the sensible person I am, when I was on the plane I had a little gin and tonic and decided that was not enough because I didn't want to sell him.
"When I got off the other end I got on the phone to Derek and said 'I think if you get £35m then there's a discussion', thinking there's no way Kenny Dalglish is going to spend £35m on Andy Carroll.
"I went to training, popped around and it was all enjoyable. Then there was the bid for £35m, we were all stunned. It was the British transfer record at the time and it was a massive problem for us, it left us really short."
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As the deal was completed so close to the window closing it meant that Newcastle had to look at the free agent market.
Pardew continued: "We had Leon Best and Shola Ameobi, but it was really going to be a battle to stay in the division and it was my first year. You can imagine how the fans felt.
"The only option I had, because the window had closed, was to find Shefki Kuqi, who didn't have a club.
"It turned out to be a massive positive because he was a massive character. He didn't play much, but the fans were up in arms as we exchanged Carroll for Shefki Kuqi. It turned out to be an asset for us off the pitch rather than off it."
Newcastle did manage to turn things around in the second half of the season and finished 12th.