We'll give Mac pounds 1m a season.
The staggering deal would make him the highest paid player in the history of the club.
McManaman is only half way through a five-year deal but is attracting interest from a number of top European clubs including Juventus, Barcelona, Real Madrid and the two Milan outfits.
Liverpool are desperate to secure his services and are set to double his current wages of pounds 10,000- a-week.
McManaman's displays for England in Euro 96 enhanced his growing reputation and German boss Bertie Vogts has selected him as one of only three Premiership players in a European Select XI to take on an African All star side next month.
The attacking raider has been a key man in Liverpool's revival in the last three years.
Boss Roy Evans admitted recently: "Macca's beyond offer. There's no one like him in the English game."