The Sun says Cole will be dumped by Liverpool in the summer.
The former England playmaker, 29, has struggled to make an impact at Anfield since signing on a free from Chelsea last July.
Kop flop Cole has started just eight league games this season and now the Reds are ready to cut their losses on the £100,000-a-week star.
A Liverpool insider said: "It's tough on Joe because he is a great kid. But things just haven't worked out for him.
"Kenny is building a new Liverpool with the likes of Andy Carroll and Luis Suarez and he wants to bring in more new players in the summer.
"And, unfortunately, that means Joe will be surplus to requirements."