The 19-year-old has caught the eye after a number of impressive displays for their B-side this season, most recently in their 1-0 against Arsenal's Under-23 side to retain the Premier League International Cup which has alerted a number of England's top clubs.
Believed to be heading to the Emirates Stadium after reports in Portugal claimed the Gunners were willing to meet Leite's £15m release clause in his contract, Jurgen Klopp's side now look have overtaken the north London side in the queue and could seal the transfer this summer.
Should Leite complete the move to Anfield, it is understood that he will be loaned out in order to gain some valuable first team experience, as Liverpool's reputation of developing young talent under Klopp continues.
Leite has been a focal point for FC Porto's B-side this season, making 27 league appearances for them Portugal's second tier, while he was also a part of the Porto side reached the semi finals in the UEFA Youth League, eventually crashing out to Chelsea on penalties.
The news comes off the back of what could be a very busy summer for the Champions League finalists, as the likes of Nabil Fekir and Sami Khedira have been linked with a move to the club in the past couple of days.
It's not only Leite from FC Porto's B-side however who has been attracting interest from Premier League clubs, with his central defensive partner Diogo Queiros a reported £10m target for Bournemouth.