The Turkey international joined on loan with an option to buy in January as the Reds looked to ease their injury crisis at centre-half.
The defender also recently stated his desire to remain at Anfield and build on that success, telling the Times: “It’s Liverpool. Of course I want to stay.”
However, This Is Anfield understands that Kabak has been told by Liverpool that they will not be exercising the permanent option in his loan deal.
The 21-year-old has consequently begun discussions with other clubs as he seeks a route out of relegated Schalke, who are desperate to sell in order to ease their financial concerns.
The Reds’ decision is a direct result of their strong interest in RB Leipzig defender Ibrahima Konate.
Champions League qualification has eased Liverpool‘s worries over the potential cost of that deal, allowing sporting director Michael Edwards to push on with triggering a well-publicised release clause.
Personal terms will not represent a potential hurdle, having long been agreed in principle with the player’s representative, Jonathan Barnett.
Konate’s arrival would mark a strong start to the summer for Liverpool, who are keen to strengthen at centre-half after a season defined by injuries in that position.
However, it is understood that deals in other positions are likely to be contingent on guarantees over departures.
The likes of Divock Origi and Xherdan Shaqiri are keen to move on in search of regular football, and Liverpool‘s recruitment staff are well aware that their exits would necessitate replacements being brought in.