The Reds have reportedly accepted a bid from Burnley to sign Flanagan last month but the move was held with the defender taking his time to assess his future move.
According to the Daily Mail, Burnley are hoping to seal the deal shortly. The 23-year-old has decided to make a move to Turf Moor and he is likely to undergo a medical this weekend.
Flanagan returned to action towards the end of last season after recovering from a nightmare injury that kept him out for nearly two years.
He is still well short of fitness and Jurgen Klopp, the Reds manager, felt the best possible scenario for him to spend time on loan elsewhere to regain his sharpness and confidence.
Klopp has full faith in Flanagan’s potential and believes the Liverpool local lad can play a big part in his long-term plans but at the moment spending the 2016/17 Premier League campaign under Sean Dyche would be helpful.
A move to another Premier League club and not in the Championships would provide him with a perfect opportunity to improve his fitness.
He will become the sixth player to move out on loan with Danny Ward, Adam Bogdan, Ryan Fulton, Jack Dunn and Ryan Kent all having left Liverpool on a temporary basis.
It remains to be seen whether Liverpool have negotiated 75 percent playing clause with Burnley for Flanagan like all other loan deals this summer.
Flanagan’s departure would leave Liverpool short of options on the full-back role and Klopp could be looking to add further defensive reinforcement before the transfer window closes.