By North-west correspondent Alex Stevens

Liverpool are set to be beaten by Manchester City to the signing of Ilkay Gundogan, according to a report.

The Merseysiders are in the market for a midfield driving force this summer and have set their sights on the 25-year-old Germany international.

But incoming City manager Pep Guardiola has sanctioned a move for Gundogan and, according to the Sun, the Manchester club are on the verge of clinching a deal for one of the Bundesliga’s biggest stars.

It is reported that the Champions League semi-finalists have settled on a £30million fee for the player even though his club Borussia Dortmund were holding out for £34million.

It would be a blow to Liverpool boss Jurgen Klopp to lose out on the Germany international, who has been open about the prospect of leaving his current club in the summer window.

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

Klopp, who was Gundogan’s former manager at Dortmund, is a firm admirer of the player and, as reported by Football Insider last month month, had asked to be kept informed about the German’s situation.

The 16-cap international came close last year to joining City’s rivals Manchester United, but the 25-year-old is on the wishlist of new boss Guardiola and is ready to agree terms with the club.

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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 15 months and the German club are ready to cash in at the end of the season.