Alaba will be a free agent at the end of the season after telling the Bundesliga and European champions that he won’t extend his deal.
The Austrian centre-back, who can also play left-back if required, has rejected Bayern’s advances and won’t sign a new contract.
Liverpool have been linked with Alaba, with Jurgen Klopp and Michael Edwards set to wait until the end of the season before reinforcing the squad.
Virgil van Dijk, Joel Matip and Joe Gomez are all struggling with injuries at the moment, and Klopp has been forced to play Jordan Henderson and Fabinho at the back.
But despite their issues at the back, they are still unlikely to dip into the January market to bring in a new centre-back.
Instead, their focus is almost entirely on the summer window, with Alaba one of their top targets due to his experience and ability to play the ball out from the back.
But according to Sky in Germany, Alaba isn’t considering Liverpool as one of his top options.
Liverpool have apparently offered him a contract worth £175,000 per-week, a contract which would make him one of the club’s highest earning players.
Alaba is currently negotiating with as many as five clubs – including Liverpool – and is seemingly in no rush to make up his mind.
The Austrian is believed to be more in favour of a move to Real Madrid, despite Los Blancos president Florentino Perez being unwilling to meet his wage demands.
Spanish outlet El Confidencial claims Madrid’s interest is merely a ploy to better their bargaining power with Sergio Ramos, who is out of contract at the end of the season.
Liverpool are also linked with the Spanish veteran, as it seems they are keeping all of their options open for the summer.