The 20-year-old right-back is due on Merseyside on Monday to undergo a medical and complete the formalities of what will be a two-year loan move.
Liverpool will have the option to buy the Spain U20 international - who was seen as a potential successor to Juanfran for both club and country - next summer, though the fee will be dependent on his number of appearances for the Reds.
While Manquillo should soon follow Rickie Lambert, Emre Can, Adam Lallana, Lazar Markovic, Dejan Lovren and Divock Origi through the door, goalkeeper Pepe Reina continues to be linked with an Anfield exit.
The Spaniard is back in Brendan Rodgers' squad after spending last season on loan at Napoli, but Sky sources understood AC Milan are keen to secure his services, with long-standing San Siro No.1 Christian Abbiati coming to the end of his career.
Reina has two years of his contract still to run but his wages, believed to be in the region of £90,000 a week, appear the chief stumbling block to either a permanent or a temporary deal.