Virtually every newspaper – broadsheet and tabloid – is reporting that the 32-year-old will be brought in as a replacement for the retiring Jamie Carragher.
Liverpool's owners – Fenway Sports Group – have a policy of signing only younger players but will sanction the move for Toure because he is a free agent.
For his part, Ivorian Toure is interested in the move because he is keen to stay in the North West of England.
He has been with City for the last four seasons after a £16 million move from Arsenal in 2009 but the 2011 champions do not intend to renew his contract at the Etihad.
Toure is set to be the first building block in a new-look defence for Liverpool next season.
According to the Times, manager Brendan Rodgers is "facing a potential overhaul of his defence this summer with the futures of Martin Skrtel and Sebastian Coates in doubt. Tiago Ilori, of Sporting Lisbon, Toby Alderweireld, of Ajax, and Kyriakos Papadopoulos, of Schalke, are all under consideration."
There is plenty of speculation about Gareth Bale in the papers too with the latest suggestion being that he will sign a new contract with Tottenham…albeit with conditions.
Tottenham will smash their wage structure to keep the Welshman at the club with the Daily Mail suggesting his wages could be as high as £200,000-a-week.
The Times says that a figure between £130,000 and £150,000 is more likely but every paper seems to agree that the contract will include an option for Bale to leave the club for £50m in 12 months' time if certain clubs – most notably Real Madrid – come in for him.
Real could still try and sign him in the summer but presidential elections and a search for a new coach leaves them in a state of flux.
The news that Jose Mourinho is leaving the Bernabeu should smoothen his return to Chelsea.
Most of the papers point out this means that Chelsea can get their man without having to pay a penny in compensation.
Arsenal manager Arsene Wenger is believed to have been given a huge war chest of £70 million to spend on players in the summer.
According to the Daily Telegraph: "Arsenal have put signing a world-class striker at the heart of their summer transfer plans, with Real Madrid’s Gonzalo Higuain emerging as an increasingly realistic target."
The paper adds: "Wenger was interested in Higuain before he even joined Real Madrid from River Plate in 2007 and there is a feeling that he could now be attainable for what would be a club-record transfer fee of £19 million.
"Arsenal have also watched Stevan Jovetic, the Serbia and Fiorentina striker, but there are doubts over whether he will leave Italy. Wayne Rooney is another striker to have been considered, but he is unlikely to fit into Arsenal’s wage structure."
David Moyes wants to keep Wayne Rooney at Manchester United and the new manager is hopeful he can convince the striker that his long-term future remains at the club. (The Guardian)
Aston Villa’s saviour Christian Benteke and David Villa of Barcelona and Spain remain two of Tottenham’s known targets for next season. Zenit St Petersburg hitman Hulk and Lyon's Lisandro Lopez are also options but Clint Dempsey and Emmanuel Adebayor could leave the club. (Daily Mirror)
Fulham are showing interest in Nancy winger Yohan Mollo. The France U21 international has been on loan at St Etienne and impressed this season. He is able to play on both flanks and Nancy are willing to sell for around £4 million. (Daily Mail)
And finally, Phil Neville is wanted as first-team coach at Stoke as manager Tony Pulis prepares for crisis talks with owner Peter Coates this week. (Daily Mail)