The 26-year-old's representative Juninho Parmigiani claims the player will travel to England this weekend to finalise the deal.
He told gazetaesportiva.net: "Palmeiras' board released Diego to negotiate with Liverpool and we are going to fly to define the last details.
"We still cannot say that everything is closed because there are some things between Liverpool and Palmeiras and other details in the contract (to sort out).
"I believe everything is going to be solved this weekend.
"If everything goes as it was agreed, he is going to sign the contract and be introduced."