The agreement ends weeks of speculation about who would take over one of the Premier League's top clubs. Rodgers was one of several big-name managers the team considered before making a final decision today.
Update: Thursday, May 31 at 9:35 a.m. ET
David Anderson of the Daily Mirror reports Liverpool and Swansea have agreed on a compensation package to complete the manager's move. It was the last factor that needed to get worked out before Rodgers took over the Reds.
The report also says three of Rodgers' staff members with the Swans will follow him to Anfield with a formal introduction of the new boss likely to occur on Friday.
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Wigan Athletic manager Roberto Martinez had removed himself from consideration for the opening at Liverpool, according to Greg Stobart and Wayne Veysey of Goal.com. His decision was based on the new power structure going into place at Anfield.
The Reds want a tier of three directors to take up the duties performed by former director of football Damien Comolli in a pioneering plan to make their operations more effective.
Martinez, however, was not willing to work under three men, plus managing director Ian Ayre, and the Wigan boss informed Liverpool owners Fenway Sports Group (FSG) on Tuesday that he would not join the club.
Rodgers led the Swans to an 11th-place finish in the Premier League in their first season following promotion. The 39-year-old Northern Irishman brings the youthful influence the team's ownership group has been seeking throughout the process.
He'll be taking over a squad that didn't live up to expectations this season despite ending its trophy drought in the Carling Cup. They finished eighth in league play, however, leading to the removal of Kenny Dalglish.
Would Rodgers be the right hire by Liverpool?
A move to Liverpool marks the biggest job for Rodgers to date.
He has previously managed Watford and Reading to go along with his work for Swansea. His career record stands at 62-56-33 (W-L-D) during those three stints.
Liverpool has been working quickly to secure a new manager so the team can start being more active in the transfer market. Rodgers made a nice impression during his first season in England's top division and would be a nice fit for a rebuilding Reds side.
The sooner a deal gets finalized, the more time Rodgers will have to start getting things turned around for one of the EPL's most storied teams.