Diaz has been linked with the Bundesliga champions for weeks as Vincent Kompany looks to add a new left winger this summer.

Bayern have also shown interest in other wide players, including Lyon's Malick Fofana, Arsenal's Gabriel Martinelli, and PSG's Bradley Barcola — but Diaz appears to be their top target.

However, Liverpool are holding firm on their £70million asking price for the Colombian.

David Ornstein previously reported that Arne Slot's side value Diaz at closer to €100million (£87m) and rejected a €67.5m (£58.7m) bid earlier this month.

The recent £69m signing of Hugo Ekitike, coupled with Liverpool's pursuit of Newcastle striker Alexander Isak, has further intensified speculation about Diaz's future.

David Ornstein previously reported that Arne Slot's side value Diaz at closer to €100million (£87m) and rejected a €67.5m (£58.7m) bid earlier this month.

The recent £69m signing of Hugo Ekitike, coupled with Liverpool's pursuit of Newcastle striker Alexander Isak, has further intensified speculation about Diaz's future.

"Bayern Munich is getting closer to signing Luis Diaz," Aouna wrote.

"Talks between the clubs are ongoing and progressing well. The German club is confident that a deal will be closed for around €75m (£63.5m)."

"Diaz was not included in today's squad, due to the progress in negotiations."

Should Liverpool receive a €75m offer, they would likely be in a position to make a formal move for Isak.

Darwin Nunez was also left out of the squad against Milan. The Uruguayan striker is seen as surplus to requirements after three underwhelming years at Anfield.

He was heavily linked with Napoli earlier this summer, but the Serie A side opted to sign Lorenzo Lucca instead of meeting Liverpool's reported £60-70m valuation.

Saudi clubs remain interested in both Nunez and Isak. While Isak is not interested in a move to the Middle East, Nunez may have fewer options — potentially forcing a decision later in the window.

If Slot does land Isak following the arrival of Ekitike, Liverpool may be forced to lower their asking price for Nunez in order to balance the books.

When discussing Liverpool's recent transfer business, Slot said: "I think what I've also said is I'm really happy with the squad we had. That's what we also showed by not bringing in new players last season.

"Now we won the league, but you can see everywhere around us - in the Premier League but also we play in Europe so we want to achieve things there as well - that all of these teams try to strengthen their squads.

"So, if you do the same as we did last year we will probably not be able to win it again.

"So, we have to improve - the players that are still here and we've tried to bring new energy in but also 'weapons', as you called it, and I think the players we've brought in have shown already in the few times we have trained together and the games we've played.

"Now let's wait how Hugo [Ekitike] is going to do that. Really pleased what we did until now, but already really pleased we kept the players that had an extended contract last season."

Bayern Munich close in on Liverpool winger Luiz Dias