Sinclair has agreed to join Watford ahead of next season with his contract running down.
Sinclair's contract with the Reds expires this summer and he will join the Hornets from the start of July. However the Echo's report suggests that Liverpool accepted a bid of around £4 million, plus add-ons from Bournemouth in April, and are hopeful that a tribunal will rule that a similar amount should be paid by Watford after Sinclair showed no interest in linking up with the Cherries.
Watford's interest in Sinclair has been held for some time with reports suggesting he was attracting interest from Vicarage Road back in the January transfer window.
The forward's playing time at Liverpool will have been limited, given that he only managed to make five first-team appearances for the Reds - scoring one goal in the FA Cup third round tie against Exeter City.
Watford are said to have had an offer of £1.5 million rejected in January according to the same report, so it will be interesting to see how a tribunal rules.
If Liverpool's experience is anything to go by this season with Danny Ings, after he made the switch from Burnley last summer, it could be a drawn out affair with some kind of compromise fee paid between the two clubs' respective valuations, although it is hard to guess the outcome of these situations.