The Reds are prepared to discuss their captain's future but only on one condition.
The club are yet to offer the 34-year-old a new deal and many critics have lambasted the Reds for their inability to act quicker.
Gerrard is a club legend & icon and a potential Anfield exit could see him snapped up by a rival just as Frank Lampard was by Manchester City after leaving Chelsea.
But Brendan Rodgers is willing to offer the midfielder a new deal, according to the Telegraph's report, only with the condition that he accepts a smaller role within Liverpool's squad.
At 34, Gerrard is not a long-term solution on Merseyside and the skipper's form has already been criticised this season.
Gerrard will thus have to accept the fact that he is likely to play less games in the future if he puts pen to paper to a new Liverpool contract.
Doubt over the midfielder's future stemmed from recent comments he made to the press.
"I won't be retiring this summer. I will play beyond this season," Gerrard said in an interview with the Daily Mail and Daily Telegraph.
"We will have to wait and see if that's at Liverpool or somewhere else. That's Liverpool's decision."