Kenny Dalglish will return to Liverpool as a member of manager Rafa Benitez's backroom staff, according to reports in England's Sunday newspapers.
Dalglish, 58, who is widely regarded as the club's greatest-ever player, will have an advisory function with an emphasis on developing young players, the reports said.
The Scot, who managed the club from 1985-1991, would not be involved in coaching the first team. Although the club made no official announcement, a statement is expected before the end of the season.
Benitez, who recently signed a new long-term deal to remain at Anfield until 2014, is eager to improve the youth structure at Liverpool's Academy and Dalglish is keen to be involved, according to well-placed sources.
Dalglish won six League titles with Liverpool, leading them to the FA Cup and League double in 1986 as well as three European Cups.
He was manager of the club when the Hillsborough disaster occurred in 1989 and is still revered by fans, who often refer to him as 'King Kenny'.
Itandje downplays incident
Meanwhile ,Charles Itandje has sought to play down the growing furore over his behaviour during Wednesday's Hillsborough service.
The Liverpool reserve goalkeeper was yesterday suspended for 14 days while the Barclays Premier League club investigate his conduct during the service at Anfield.
Television footage appeared to show the player laughing and nudging team-mate Damian Plessis during the service to remember the 96 people who died at the FA Cup semi-final clash between Liverpool and Nottingham Forest on April 15 1989.
Itandje yesterday issued an apology in an interview with the Liverpool Echo newspaper, in which he stated it had not been his intention 'to offend or disrespect anyone'.
The 26-year-old Frenchman has since claimed the incident has been blow out of proportion, telling Aujourd'hui Sport newspaper: 'It is a 30-second clip about which people are going overboard.
'You need to see an hour of the video if you want to judge my behaviour, but you know the papers over there [in England]. They make a big deal of things.'
When asked if he could describe what he was doing in the footage, which has been circulated on the Internet, Itandje replied: 'No idea. I haven't even seen it. I don't know at what moment it was being filmed.'
Itandje revealed he has had no contact with Liverpool boss Rafael Benitez since his suspension was announced early yesterday morning.
'I have had no explanation,' he continued.
'I have not even had the opportunity to explain myself to the club.
'Sammy Lee, the assistant manager, called me on Friday morning to tell me not to turn up at training.'
The former France Under-21 international revealed his position at the club, for whom he has made just seven first-team appearances since signing from Lens in 2007, will not be greatly affected by the fallout from his actions.
'It does not change a great deal, as I am already on the transfer list,' he said.
'I should be leaving this summer. I am not used in the team.
'I don't want to seem paranoid, but I hope this is not linked with my situation at the club.'
He added: 'It's not the club I need to explain myself to, it's the families [of the Hillsborough victims].
'I sympathise with them and I would like to tell them that.'
