talkSPORT understands that the Reds have agreed a £111million deal for the Brighton star, making him one of the most expensive players ever.
Jurgen Klopp is landing a hugely talented midfielder that was much needed after the exodus of Jordan Henderson, Fabinho, Naby Keita and James Milner this summer.
But it will have come as something of a surprise that Liverpool are even able to spend so much on one player, judging by Klopp's previous comments.
The Anfield club were one of the serious contenders to sign Bellingham this summer, before he joined Real Madrid for an initial £88.5m, potentially rising to £115m.
In April, Klopp batted away questions about the star England midfielder as he hinted that the club could not afford him.
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He explained: "There's nothing to say about it to be honest.
"If we don't speak about players we are signing or not signing, why would I talk about it now?"
Klopp then added: "It's not about Jude Bellingham.
"I never understood why we constantly speak about things we theoretically cannot have. You have to realise what you can do. It's about what you can do, and you work with that.
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"You have to work with what you have. We are not children. You wouldn't say as a five-year-old at Christmas you want a Ferrari, you don't say 'that's a good idea'. It's too expensive and you can't drive it.
"Whatever we need and want we try absolutely everything to get it but there are moments when you have to accept it's not possible and step aside and do different stuff."
That is not the only time that Klopp has commented on transfer spending, claiming that Liverpool cannot compete with their rivals.
Just six years ago, when Manchester United were looking to re-sign Paul Pogba for big money, the said that he would never sign a player for £100m.
Klopp said: "If you bring one player in for £100m and he gets injured, then it all goes through the chimney.
"The day that this is football, I'm not in a job anymore, because the game is about playing together.
"That is how everybody in football understands it. You always want to have the best, but building the group is necessary to be successful.
"Other clubs can go out and spend more money and collect top players. I want to do it differently. I would even do it differently if I could spend that money.
"I don't know exactly how much money we could spend because nobody has told me, 'No, you can't do this'.
"If I spend money, it is because I am trying to build a team, a real team. Barcelona did it.
"You can win championships, you can win titles, but there is a manner in which you want it."
Fans rightly raised questions on social media about the fee in relation to Bellingham.
One fan wrote on Twitter: "So instead of spending £80m-£90m on Bellingham they went and spent £110m on Caicedo?? Shambles, his value is half that."
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Another added: "Just remember, the reason Liverpool didn't sign Jude Bellingham was because 'they couldn't afford him' - then they spend £20m more on Caicedo."
A third said: "Genuinely do wonder how on earth we said we don't have the money for Bellingham, but we splurged more than Bellinham's fee on Caicedo."