The towering Australian arrives to provide competition to experienced keeper Stuart Nelson and will remain at Huish Park initially until January.
Having started out playing junior football in his home country, the 20-year-old joined the Royals in 2015 and has gone on to be a consistent performer at both under-18 and under-23s level.
Turning professional at the Madejski Stadium in 2017, Driscoll spent pre-season on tour with the first team before a successful loan spell at Staines Town saw him return and pin down a starting spot in the under-23s side in 2017/18.
Continuing his development, the 6’4″ stopper gained further experience at Hungerford Town and Salisbury last season but now links up with the Glovers.
Bolstering his squad ahead of Saturday’s National League opener at Barnet, manager Darren Sarll said: “Liam’s a young player who’s ready to take this next step in his development.
“He’s impressed in training and has all the attributes required to develop into a fantastic goalkeeper and now has the chance to learn off of someone as experienced and dedicated as Nels.”