The 20 clubs were required to submit revised squad lists for the remainder of the campaign after deadline day, allowing the top flight to register new arrivals and players who have transferred.
For Liverpool, that has meant the addition of Diaz, who is set to arrive on Merseyside ahead of the weekend after his £50 million switch from Porto.
Karius was effectively included in the summer as it would have made no sense not to, however now with Diaz needing to be registered in order to play in domestic fixtures, the German had to make way.
It could pave the way for a permanent exit for Karius in the coming weeks, with the transfer window still open in Switzerland, where Basel hold an interest.
This is possibly due to Phillips being eligible as a homegrown player, though there is a chance that the squads have simply not been updated properly, as Morgan Boyes – who joined Livingston on a permanent deal in January – is still registered.
Liverpool have six other homegrown players registered, which is why Karius cannot be named despite only 24 players being included, as a full 25-man squad must include eight homegrown players.
Liverpool’s updated Premier League squad
Defenders: Van Dijk, Matip, Konate, Gomez (HG), Phillips* (HG), Alexander-Arnold (HG), Robertson, Tsimikas
Forwards: Salah, Mane, Jota, Firmino, Diaz, Minamino, Origi
Notable U21s: Elliott, Jones, N.Williams*, Gordon, Clarkson, R.Williams, Bradley, Beck, Morton, Pitaluga
* Out on loan.