As part of an ambitious summer squad rebuild, new Liverpool boss Andoni Iraola has been handed a sizable transfer budget to work with, and the Spaniard has already landed a £34.5M deal for Victor Munoz.
Iraola wants to bring in fresh faces for both of his wide attacking spots at Anfield, following the departure of Mohamed Salah and speculation over Cody Gakpo's future, which has intensified the Reds interest in Diomande.
However, Leipzig are looking to make a significant profit on the 19-year-old, who they signed from Spanish side Leganes for £17.3M last summer, and the Bundesliga outfit have reportedly rejected Liverpool's opening €100M offer.
Transfer expert Fabrizio Romano indicates Liverpool will make an improved offer in the coming weeks - which could smash the Premier League transfer record of £125M they paid to land Alexander Isak last summer - and Diomande is keen on a move to Anfield.
Breaking the €100M barrier represents a leap of faith from Liverpool for a player with just one season in the German top-flight and reports from Bild clam Paris Saint-Germain will now rival Iraola in the race.
PSG have reportedly spoken to Diomande's agents Roc Nation, and could be open to meeting Leipzig's €125M demand, as the exciting winger is under contract until 2030 with no release clause.
Liverpool will now hit pause on the bidding process, to avoid a price war with PSG and assess the Parisians intentions over a formal offer.