Liverpool held talks with David Alaba's representatives to determine whether a move for the Bayern Munich defender would be plausible.
Alaba has been linked with a number of elite European clubs with his contract due to expire in the summer.
Real Madrid are thought to be Alaba's preferred destination amid interest from the La Liga club, while Chelsea are also keeping tabs on the Austrian.
But despite previously considering signing Alaba, it now appears Liverpool have opted out of the running.
As reports the Independent, Alaba's camp were approached by Liverpool chiefs last year to discuss a potential free transfer.
At the time Liverpool used it as a two-fold mission, with their ulterior motive to determine Alaba's demands to aid their negotiations with his then teammate Thiago Alcantara.
Alaba wanted a package worth £12million a year after tax – the equivalent of £230,000 per week post-deductions – an astronomical figure by any club's standards.
That was not necessarily a deal breaker as far as Liverpool were concerned, but the club had their own reasons for dropping their interest.
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It's been an extremely interesting start to the season for Jurgen Klopp's men.
They got their title defence off to a shaky start as they edged out a seven-goal thriller against Leeds, before going on to conceded seven in a hammering by Aston Villa.
Virgil van Dijk's season was ended by injury in the 2-2 draw at Everton, leaving the title favourites looking far less secure at the back – especially with Alisson's injury worries too.
But there's no slowing down in what is going to be a busy campaign – with Klopp ensuring his men continue at full pace as they bid for more title glory.
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Firstly, Alaba was deemed by Liverpool coaches as smaller than their ideal height for a central defender, as he stands a good few feet below Joe Gomez, who is the smallest of the Reds' current options.
There was plenty of appeal in Alaba's versatility to occupy at left-back, but that soon diminished when Kostas Tsimikas was brought in as cover for Andy Robertson.
In addition, Alaba will turn 29 in the summer, and while Liverpool were happy to sign Thiago at the same age, they would rather focus on developing a younger player to fulfil the role instead.
Who should Liverpool sign to help ease their defensive woes? Have your say below.
Any new defender coming in would essentially be third or fourth choice behind Gomez and Virgil van Dijk when both are back fit, and forking out huge sums on Alaba's wages for him to potentially play just a bit-part role did not make any sense financially.
Liverpool could have made their move this month of course, to help ease their injury crisis, but it would be a costly procedure which offers no certainties in the short term.
Alaba is instead expected to complete his "dream" move to the Bernabeu with talks already believed to be underway.
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