The Merseyside club have already made one of the biggest moves of the mid-season window in signing Virgil van Dijk from Southampton for £75m but there could be another major signing to come with Philippe Coutinho's future hanging in the balance.
Barcelona have renewed their attempts to sign the Brazil international this month after three failed bids during the summer transfer window and according to a latest report from Catalan daily Sport, the clubs have agreed a €120m (£106m) fee plus €40m in add-ons to finalise the deal.
Liverpool will be expected to pursue a replacement for Coutinho should the deal be pushed through this month with Monaco star Thomas Lemar, valued at €100m during the summer window, one possible option for Jurgen Klopp's side.
But according to L'Equipe, the Premier League side have also identified Mahrez as someone who can fill the void to be left by Coutinho. The French publication report Liverpool officials have already made contact with the former Le Havre starlet, adding Leicester will privately consider cashing in on the 26-year-old should the right offer come in.
Publically however, Leicester boss Claude Puel has stated his desire to keep the Algeria international at the King Power Stadium, believing the player is happy to see out the remainder of the season at the club.
"I want to keep all my best players and Riyad is an important player in the team for us. When I discussed things with him, he had a good attitude and is enjoying his football
"He is a happy player and likes to play with his teammates. His statistics have improved, with assists and scoring. Of course I want him to continue all this good work."
The winger has two years remaining on a four year contract signed in the summer of 2016, said to be worth £100,000-a-week.