Liverpool and Arsenal are heading to a tribunal after failing to agree on the compensation due for 16-year-old Vincent Joseph.
The Daily Mail report that Joseph, who played for Liverpool's under-18 side, left the Reds last month. The club had offered him a scholarship due to be signed by 1 July.
He rejected the offer amid interest from a host of clubs, including Manchester United, Chelsea, Bayern Munich and Borussia Dortmund.
Premier League champions Arsenal won the race for his signature.
Negotiations with Liverpool over the compensation followed, but the two clubs could not find common ground.
With the talks deadlocked, both parties will now take the matter to a tribunal to settle the fee owed to the Reds.
Isaac Mabaya was the last teenager to leave Liverpool for another Premier League club.