Allan has had trouble obtaining a work permit and a loan spell is his only option.
The Brazilian spent last season on loan at Seinäjoen Jalkapallokerho and Sint-Truident as the 19-year-old has been unable to get a work permit thus far.
In May, the Liverpool Echo reported that he would spend another season out on loan because of problems attaining a work permit.
They also report that Allan is rated highly by manager Jurgen Klopp, who will be keen for the player to get some regular game time at a decent level.
The Bundesliga side qualified for the Europa League at the third qualifying round so there is an opportunity for the Brazilian to get some decent minutes on the pitch, even if he were rotation option, both on the big stage and in a decent European league.
With Allan unable to play football for the Reds, it is essential that he manages to play football for a good club of a decent standard and Hertha seems to fit the bill.
Last term they finished in seventh position in the Bundesliga following a couple of nervy mid-table finishes.
It will be interesting to see just how much game time he gets in the German capital, but given that Klopp only seems to sanction loan deals with guarantees his players will play, many Liverpool players may be keeping an eye on Hertha's progress along with Allan's this season.