Preparations are underway for the 20-year old to undergo a medical in Germany on Deadline Day, if a deal can be agreed.
Liverpool are working on paying a loan fee of around £2.5m to sign Kabak until the end of the season with an option to buy the player in the summer.
The deal remains complicated, with the Bundesliga club unwilling to let Kabak leave without first signing a replacement, with the deadline for signings in Germany at 5pm UK time.
Kabak was on Liverpool’s radar in the summer and is a long-term target of the club’s recruitment team.
Schalke paid £13m for him in 2019 and he is contracted to the Bundesliga club until 2024.
Liverpool are also close to signing Preston defender Ben Davies, with the centre-back undergoing a medical ahead of a £1.6m move to Anfield.