The Reds have reportedly set their sights on the £10 million-rated Blues defender in order to strengthen their defence after failing to secure the Blackburn man
The 24-year-old is said to be despereate to stay in the Premier League after Birmingham were relegated after a miserable finish to the 2010-2011 season.
Arsenal are also reportedly thought to be in the running for his signature, with Arsene Wenger looking to reinvigorate his struggling defence next season; however, this looks unlikely as Dann is a lifelong Liverpool supporter and former season ticket holder, which could work in Liverpool manager Kenny Dalglish's favour.
It has been reported that Dann could command a fee of £10 million, somewhat of a bargain price given the big money transfers of Phil Jones [£16m to Manchester United] and Jordan Henderson [£20m to Liverpool].
The former Walsall and Coventry City defender, has made sixty appearances for Birmingham City's first team, and has garnered attention from a host of Premier League clubs despite injuring his knee in January's League Cup semi-final.