Brendan Rodgers is thought to be in the market for a new centre-back this off-season, after watching his side concede 38 goals in the Premier League this term – the highest total of any top four side.
Musacchio has emerged as a recent target, with the Reds chief tempted to bring him in on a free transfer.
The Argentine’s current deal expires at the end of the season, and it is thought that he could be open to joining a side plying their trade in the Champions League – which Liverpool are currently on course to be doing.
Benfica’s Ezequiel Garay is also seen as an option, but with Musacchio only 23 and set to not command a fee of any kind, a deal is appealing.
He may also be used as a replacement for Daniel Agger, with the experienced Dane attracting interest from a host of top clubs such as Barcelona and Napoli.
Barca are also keen on Musacchio, but a greater chance of first-team action at Anfield may be more appealing.