The Reds are ready to cash in on the 19-year-old this summer having been informed the player has no desire to extend his Anfield contract.
Camacho is about to enter the final year of his current deal, and is desperate to secure first-team football in the coming season.
Sporting, his home-town club, were keen to sign the versatile teenager on loan in January but Liverpool vetoed that move, eager not to lose another potential full-back option following Nathaniel Clyne’s switch to Bournemouth.
Now, the Portuguese giants are ready to put together a permanent deal for Camacho, but will face stiff competition from Schalke.
The Bundesliga side have registered their interest, and hope to use the fact that their new manager, David Wagner, is close friends with Jurgen Klopp in order to push through a deal.
Reports in Germany this week have claimed that Schalke have already agreed terms with Camacho and his camp, but sources close to the situation have told Goal that nothing is imminent at this stage.
Camacho made his senior debut for Liverpool in January’s FA Cup third round defeat at Wolves, playing as a right back. He later appeared as a late substitute against Crystal Palace for his Premier League bow.
Signed from Manchester City in 2016, he impressed initially as a winger in the Reds’ under-18 setup, but made his first-team impact as a full back after shining there for Steven Gerrard’s team in the 2017-18 campaign.
Schalke are among a number of clubs keen on another Liverpool youngster, Taiwo Awoniyi, while 2.Bundesliga club Bochum are the latest club to have enquired about the availability of Colombian full-back Anderson Arroyo.
Liverpool allowed winger Sheyi Ojo to complete a loan switch to Rangers earlier this week, and are expected to secure temporary deals for Kamil Grabara, Ovie Ejaria and Ben Woodburn, among others, in the coming weeks. Brazilian midfielder Allan Rodrigues de Souza is set to extend his stay at Fluminense until December.