The Serie A side is willing to do a deal with the Reds but will not consider a loan move for the Italy international striker and is holding out for a permanent sale.
Mino Raiola, who represents a number of top-level footballers, including Balotelli and Zlatan Ibrahimovic, has flown to England to guage the Reds' interest in his client.
The Merseysiders are also in talks with Milan, which — despite earlier denials from CEO Adriano Galliani — is willing to let Balotelli leave San Siro but will only consider a permanent switch and not a loan move, having confirmed negotiations with the Merseysiders on their official TV channel.
Brendan Rodgers has insisted throughout the summer that he will not panic in his search to replace Luis Suarez, who joined Barcelona for just over 88 million euros.
A 10 million euro move for Loic Remy fell through amid claims of a failed medical, while rumors linking the club with Monaco striker Radamel Falcao also persist.
Balotelli has been unhappy at Milan for several months but, while Galliani has been keen to keep hold of him, Rossoneri owner Silvio Berlusconi wants to complete a sale.
Berlusconi even claimed following the World Cup that the striker's poor performances in Brazil had scuppered a big-money deal with an English club.