Ezequiel Lavezzi will turn down a move to Liverpool to move back to Italy at either Juventus or AC Milan.
The Reds had reportedly been monitoring the Argentine's situation at Paris St-Germain in the hope he might become available when the French club complete the proposed signing of Angel Di Maria.
The 29-year-old was viewed as an attacking alternative to striker Luis Suarez, who left Anfield last month for Barcelona.
But the manager Brendan Rodgers is likely to have to look beyond Lavezzi, who is keen on a return to Italy if he parts with the Ligue 1 champions.
Reports claimed the Argentine's representatives had been in contact with Juventus and it was believed a preliminary deal was in place. However, PSG have so far emphatically ruled out selling any attacker.
However, Di Maria's touted move to Laurent Blanc's side from Real Madrid could render the World Cup runner-up expendable and a return to Italy on the cards.
Juve manager Massimiliano Allegri has asked to be kept informed of Lavezzi's position and believes a move could be possible within the next two to three weeks. A move to the bianconeri would see Lavezzi team up with compatriot Carlos Tevez, who left Manchester City for Turin in 2013.
Allegri's chase of the forward puts him on a collision course with former employers AC Milan, who have registered an interest in taking Lavezzi to the San Siro as the club looks to bounce back into the Champions League following a one-year absence.
Milan president Adriano Galliani has also been in contact with PSG general manager Jean Claude Blanc to enquire about the possibility of prising Lavezzi from the French capital.
The forward spent five years at Napoli before making a €26.5m move to PSG in 2012 as part of the club's spending splurge under owners Qatar Sports Investments.