Gerrard is widely renowned as a legend on Merseyside, a one-club man who would never turn his back on the team for a potential rival.
However, back in 2005 he was close to joining current Premier League leaders Chelsea in a blockbuster move during Mourinho’s first stint at the club.
The Portuguese coach admitted that the deal was almost there, and he was on the brink of creating a potential partnership with Frank Lampard and Claude Makelele, which could have gone on to create history.
"He (Gerrard) is a historical player for Liverpool, a historical player for the Premier League and an opponent I have always admired and respected," Mourinho told Sky Sports.
"We did everything to try (to sign him) and it was almost there. I was dreaming of (Claude) Makelele, Gerrard and (Frank) Lampard in midfield.
"We were playing in a proper triangle without a number 10 and playing Maka in front of the defenders. Me, Mr Abramovich and (former Chelsea chief executive) Peter Kenyon at that time, we dreamed of that.
"His people were open to him joining a top side like Chelsea. But to me personally he never said he would come. Never. He (Gerrard) was always a red and I think the decision was right."
When quizzed by reporters on whether failing to sign Gerrard was his biggest transfer regret, Mourinho concedes as much before revealing that a near Frank Lampard move to Inter Milan also hurt.
"Yes, but I have another one when I was trying Lampard to Inter. I was almost there and it didn't happen too. I had a couple of disappointments and that's normal in football,” he added.
Gerrard and Mourinho are set to face off again in the League Cup semi-final clash at Anfield on Tuesday, potentially the former England skipper’s last chance of an trophy at Anfield before joining the MLS.