Liverpool manager Jurgen Klopp has begun plans for next season and has earmarked Manchester City midfielder Fernando as a potential transfer this summer, according to The Sun.
The Brazilian's former club Porto are also keen on bringing him back and reports in Portugal indicate he would be available at the end of the season.
Despite starting three of City's last four games in all competitions, Fernando has found first-team action hard to come by this campaign under Manuel Pellegrini, who is also set to depart Etihad Stadium.
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The 28-year-old has largely been on the fringes of City's squad since his 2014 move, playing second fiddle to Fernandinho and Yaya Toure.
Liverpool are closely monitoring the situation and could offer up to £10 million for his services, but they're unwilling to pay any more.
It's believed Klopp wants to complete transfers nice and early this summer in order to commence a full and stable pre-season.
The German has held a big impact since taking over as manger on Merseyside, so much so that the top four is in sight and a Europa League quarter-final looms against former club Borussia Dortmund.
However, the general concensus seems to be that Klopp needs a few new faces in order to develop Liverpool into a title-winning side.
Fernando is currently contracted with City until 2019 and could be among a host of players to exit the club this summer upon Pep Guardiola's arrival.
The Spanish manager faces the tough task of revamping the Citizens' squad, which has failed to perform this season and shown signs of ageing.