Liverpool boss Brendan Rodgers has insisted Mario Balotelli will not be going out on loan in the January transfer window.
West Ham hope to finalise the transfer of Joe Cole from Liverpool on Friday morning, Press Association Sport understands.
On Thursday Cole underwent a medical at the club's training ground after it emerged that Liverpool are prepared to cancel the 31-year-old's contract.
The Hammers, who brought Cole through their youth academy in the 1990s, hope the midfielder will sign his new contract with the east London club before midday so he can play in Saturday's FA Cup third round clash against Manchester United.
Should the deal go through, it will end a nightmare two-and-a-half-year spell on Merseyside for the former Chelsea player.
Cole has started just nine Barclays Premier League games since he swapped Chelsea for Liverpool in the summer of 2010, and spent last season on loan at French club Lille.
Reds boss Brendan Rodgers deemed the Londoner surplus to requirements when he took over last summer and Cole is keen to go back to Upton Park, where he spent four years in the youth system before going on to become a first team star for five seasons.
It is understood that Liverpool would pay Cole a negotiated settlement in order to get his estimated £100,000-a-week salary off the wage bill.
West Ham midfielder Sebastian Lletget welcomed the club's move for Cole.
He tweeted: "Training with my man Joe Cole today, top player, looking forward to it."
Joe Cole factfile:
1981: Born Camden, November 8.
1998: Signs professional forms with West Ham.
1999: January - Makes first-team debut in FA Cup tie with Swansea at Upton Park.
May - Helps the Hammers win the FA Youth Cup with two-legged final win over Coventry.
November - Scores first goal for first team in League Cup.
2000: September - Called up to the England squad for a friendly against France in Paris, but fails to play.
2001: February 12 - Scores eight minutes from time in 1-1 Premiership draw with Coventry.
May 25 - Makes England debut as a substitute in 4-0 win over Mexico at Pride Park.
2002: June - Selected in England's World Cup squad. Makes one appearance, as a substitute in the 1-1 draw with Sweden.
2003: June 3 - Scores first goals for England in 2-1 win over Serbia and Montenegro at Leicester.
August 5 - Completes £6.6million move to Chelsea.
2004: June 2 - Named in England's Euro 2004 squad, but fails to make an appearance in Portugal.
2005: February 27 - Starts Carling Cup final win over Liverpool.
May - Wins Premier League with Chelsea having scored eight goals during the season.
September 3 - Scores the only goal as England beat Wales in a World Cup qualifier.
2006: April - Named in the PFA team of the year.
May - Wins Premier League for the second time, again scoring eight goals.
May 8 - Named in England's 23-man squad for 2006 World Cup in Germany.
June 20 - Scores a spectacular goal as England beat Sweden to reach the last 16.
July 1 - Substituted in the quarter-final against Portugal following Wayne Rooney's dismissal.
2007: January - Undergoes surgery on a stress fracture in his foot.
May 19 - Plays the first half of Chelsea's FA Cup final victory over Manchester United.
2008: May - Receives Chelsea player of the year award having scored 10 goals in all competitions.
2009: January 14 - Suffers cruciate knee ligament damage, ruling him out for the rest of the season.
2010: April 3 - Scores opening goal at Old Trafford with a clever backheel as Chelsea earn crucial 2-1 win en route to Barclays Premier League title.
June 27 - Comes on for half an hour as England crash out of the World Cup in the last 16 with a 4-1 defeat to Germany.
July 19 - Signs for Liverpool on a four-year contract.
August 15 - Sent off on his league debut for the club against Arsenal.
2011: August 31 - Joins Lille on a season-long loan, going on to score nine goals in 42 appearances for the French club.
2013: January 3 - Understood to be having a medical ahead of a return to West Ham.