Liverpool are preparing a £15 million bid after midfielder has been told that he can leave Madrid this week, according to reports from Marca.
The Reds have been linked with the 25-year-old for most of the summer transfer window, but the uncertainty at the Bernabeu has been an obstacle.
Recent reports from the Spanish daily Marca, Illarramendi is behind new signing Mateo Kovacic in the thoughts of Rafa Benitez.
Illarramendi moved to Real from Real Sociedad for €32m (£23m) back in July 2013, but has struggled in his two seasons at the Bernabeu made.
The Spanish playmaker could be a replacement for Lucas Leiva at Anfield, with the Brazilian thought to be eyeing a move away from the club.
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