By North-west correspondent Alex Stevens

Liverpool are ready to rival Manchester City and Barcelona for the signing of Ilkay Gundogan, Football Insider sources understand.

The Borussia Dortmund midfielder has told the Bundesliga side he will not be extending his contract, which expires in the summer of 2017.

Gundogan is set to leave Dortmund at the end of the season in a £20million-plus deal.

The Germany international came close last year to joining City’s rivals Manchester United, but the 25-year-old is now a serious target for incoming manager Pep Guardiola.

Reports in Spain have claimed Gundogan has committed himself to City but a Liverpool source has told Football Insider that the Merseysiders have not given up hope of landing the 16-time capped midfielder.

Liverpool boss Jurgen Klopp, who was Gundogan’s former manager at Dortmund, is a firm admirer of the player and has asked to be kept informed about his situation.

Gundogan joined Dortmund from Nuremberg for £4million in 2011 and has established himself as one of Europe’s most sought-after midfielders.

He signed a contract extension last summer but it is due to expire in 16 months and the German club are ready to cash in at the end of the season.