Speaking to Sky Sports News Radio, new United manager David Weir confirmed that Coady will be joining The Blades shortly.
"Conor is a top player, I've seen him a lot and desperate to join us as well," he said.
"Liverpool have been great to deal with and Brendan Rodgers has been fantastic.
"It benefits both sides, which is what a loan is supposed to do."
Coady made one appearance for Liverpool last season in a 3-1 victory over Fulham, and skippered the Three Lions' Under-20 side in their disappointing World Cup campaign in Turkey.