The former West Brom talent is highly rated at Melwood.
The same report claimed that the 17-year-old has trained with the Liverpool first-team at times in the past year and his professional deal comes after turning 17 on Monday.
He has signed a two-and-a-half year deal to remain at Anfield until 2018.
The England youth international also has a big following in India, where Liverpool are a popular club, because of his Indian heritage.
An attacking midfielder with an eye for goal he will be hoping to push on in the future and become the first player of Indian background to have played for Liverpool.
Fans are rightly excited by his precocious talent.
Here is how Twitter reacted to Dhanda signing his first pro deal with Liverpool...
Congrats to Yan Dhanda on his first professional contract. #lfc— Josè (@Joseph_Ellis9) December 17, 2015
LFC Bangalore (@LFCBangalore) December 17, 2015
Yan dhanda signs his 1st pro contract at LFC... Well done— X (@GNP_UK) December 17, 2015
Yan dhanda. Proud to be Indian. #lfc# India#ynwa— Vikram RED Nain (@maverickvik_lfc) December 17, 2015
Congrats Yan Dhanda for the pro contract. One of the brightest talent for LFC u18. YNWA— Gabigol Yayam Balor (@Ilham_Farouqi) December 17, 2015