The 17-year-old will be handed a new improved deal on his 18th birthday next month having broken into the Liverpool first-team squad under Brendan Rodgers.
Ibe, who joined the Reds from Wycombe in 2012, made his Premier League debut on the final game of last season against Queens Park Rangers and impressed, setting up Philippe Coutinho for the only goal of the game.
His most recent start came against Notts County in Liverpool's 4-2 extra time Capital One Cup victory in August.
An England under-19 international, Ibe has been compared with fellow Liverpool wing academy graduate Raheem Sterling.
Like Sterling, Ibe joined Liverpool from a lower league club down south, and possesses lightning pace and good dribbling skills.
The report claims Liverpool are already in talks with Ibe's representatives over the details of the contract, although it's expected to be a five year extension.
Sterling also signed a five-year contract in 2012 after breaking into the first-team last season.