Manchester City are to offer £25 million plus £5 million in add ons for the England attacker but reportedly face competition from Arsenal, Chelsea, Manchester United and Real Madrid.
City are understood to have made a verbal offer to Liverpool on Thursday and are expected to follow that up with a firm offer in the next few days.
It is expected that the offer will consist of £25 million in cash plus £5 million in add ons for the 20 year old.
The Etihad club are the first club to make a move for Sterling's signature and their bid is likely to start a transfer scramble as Liverpool try to keep hold of their most valuable asset.
Sterling has made it clear that he has no intention of signing the £90,000 a week contract that has been offered to him which leaves Brendan Rodgers in an almost unwinnable situation.
Liverpool have already made it public to prospective suitors that a bid of around £65 million would be needed to persuade them to sell, but with Sterling's contract running out in the Summer of 2017 Liverpool's American owners will be adamant that they do not lose the player on a free in two seasons time.