Pacheco has starred for Spain’s under-19 side, scoring four goals in their run to the under-19 Championship final last summer, and has been on the fringes of Liverpool’s first team so far this season, with four appearances this term.
The 20-year-old forward is likely to be joined at Carrow Road by Wolves striker Sam Vokes, with City manager Paul Lambert confirming his interest in the duo after injuries to Chris Martin and Aaron Wilbraham.
"The two of them were desperate to come and play and that was very important to me," Lambert told the club’s official website.
"The two of them are keen to come here and I'm sure if they join us it will give the whole squad a lift.”
Lambert also added that he thought both youngsters would add to the Canaries forward line, with Vokes already an established Welsh international, scoring twice in 16 appearances for his country.
He added: "Sam Vokes had a terrific time at Bournemouth at the start of his career and he's a threat and a presence around the box.
"He's a hard-working player and he would add to the mix of options we have up front.
"Dani Pacheco is a lad we've seen playing for Liverpool's first team this season and I've been talking to Kenny Dalglish about him for a few weeks now.
"He's technically very good as you'd expect having been with clubs like Barcelona and Liverpool and the fact he's away with Spain's Under-21s side at the moment speaks volumes for his ability and potential."
Norwich currently sit second in the Championship and are on course for automatic promotion and a long-awaited return to the Premier League.