Javier Manquillo will undergo a medical ahead of his move to Liverpool.
The Metro reports Atletico Madrid have accepted an offer from the Reds which will allow the right-back to stay on loan for two years with an option to secure a permament deal for £4.7million afterwards.
Manquillo was close to joining Arsenal until Liverpool confirmed their interest on Monday which led to him snubbing the Gunners.
The 20-year-old believes he will have more chance of playing first-team football at Anfield rather than the Emirates Stadium where Mathieu Debuchy has just arrived.
With Manquillo set to join, it continues an active summer transfer market for boss Brendan Rodgers who has already signed Rickie Lambert, Emre Can, Adam Lallana and Lazar Markovic.
Deals for strikers Loic Remy and Divock Origi are also said to be close with the two reportedly finalising their transfers in Boston where Liverpool are spending pre-season.
Rodgers has an extra £75million to spend after the sale of Luis Suarez to Barcelona.
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