Roy Hodgson is set to be appointed Liverpool's new manager by Thursday
The Reds were granted permission to speak to the 62-year-old two weeks ago by his current club Fulham.
Hodgson has also been linked with the England manager's job following the team's humiliating exit from the World Cup but Liverpool have acted quickly.
The Englishman will replace Rafael Benitez in the Anfield hot seat after the Spaniard left at the start of June.
"Hodgson has always been the number one target of the board at Anfield to replace Benitez," said Ian Dennis, Radio 5 live's senior football reporter.
"After Fulham granted Liverpool permission to speak to Hodgson, it was just a matter of the clubs agreeing a compensation deal for him."
Hodgson has been in charge of Fulham since December 2007 and signed a new 12-month rolling contract in December 2009.
Although he suffered a difficult start to his tenure, winning only nine points from his first 13 league matches, he saved the club from relegation in 2007/8, securing survival on the final day of the campaign.
The following season he steered the club to seventh place in the Premier League - their highest ever finish - and a place in the Europa League.
His achievement in guiding Fulham to the final of that competition, when they beat Juventus and Wolfsburg en route, saw him named last season's manager of the year by the League Manager's Association.
Hodgson has also managed Italian giants Inter Milan, Blackburn and Switzerland, who he guided to the last 16 of the 1994 World Cup.
Aston Villa boss Martin O'Neill, former Real Madrid coach Manuel Pellegrini, ex-Chelsea boss Guus Hiddink, Croatia coach Slaven Bilic and former Manchester City manager Mark Hughes have all been linked with the Liverpool post.
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