The Senegal international midfielder had insisted that he had not been contacted by Harry Redknapp's men, but it appears that Liverpool are keen to offload Diao's considerable wages by agreeing a season-long loan with the Fratton Park outfit.
Diao's compatriot El-Hadji-Diouf, still to be assigned a squad number, could be next to exit Anfield, with Spanish sides Malaga and Real Betis ready to pounce in the coming weeks.