The Reds have agreed personal terms with the England international, who will join the club on a free transfer on July 1 after his contract with Manchester City runs out.
Milner enjoyed a very successful time at the Etihad club where he won two Barclays Premier League titles, an FA Cup and a League Cup during his five-year spell.
Milner was a bit-part player for Man City but became a regular starter for the club under Manuel Pellegrini last season making 32 league appearances.
According to the Daily Mail, Milner turned down an offer of £165,000 a week to stat at City.
The deal is Brendan Rodgers' first marquee signing of the summer however, the Liverpool manager will still have to battle keep hold of stars, Raheem Sterling and Martin Skrtel.
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