Trent Alexander-Arnold has reportedly informed Liverpool on his final decision about his future.
The full-back has become a target for Spanish giants Real Madrid, who are looking for a long-term successor to Dani Carvajal.
According to Marca, the 26-year-old has informed Liverpool he will be joining the LALIGA champions on a free transfer next season.
Read: Real Madrid 'eyeing' shock move for EPL player
Reports claim the Reds had been trying to tie Alexander-Arnold down to a new deal in recent months.
The report adds that Alexander-Arnold has been briefed about the Madrid outfit by his friend and current Los Blancos star Jude Bellingham.
This will be seen as a difficult situation for Liverpool, who are now set to lose one of their prized assists on a free transfer while Los Blancos are unlikely to make a move for the player in the January transfer window.
While there is no agreement with Alexander-Arnold and Madrid, reports in Spain claim that the Spanish champions are preparing life with the player from next season.
Reds manager Arne Slot was asked the contract situations involving Alexander-Arnold, Virgil van Dijk and Mohamed Salah.
'If we would then it's probably not the moment to tell you now. In general, I don't talk about contract situations here. It would be a surprise if I was the one to announce that one of them has extended!," he said, as per the Mirror.
'Keep asking, that's your job but you're probably not going to get an answer from me. It's clear that from January 1, maybe for you guys (media), things change a lot but they are in constant talks with the club and let's wait and see what happens.
'As long as they keep performing like this, the head coach is happy.'