The German is very much on Liverpool's radar, after they enquired about his availability both last summer and again in October, per MailOnline's Simon Jones.
He is a serious talent and only likely to get better, but the Sky Blues look set to be Liverpool's main rivals for his signature and are reportedly preparing a €55 million (£40.6 million) offer for him, per German outlet Bild (via ESPN.co.uk).
Sane has shown great promise at Schalke and has netted four times and provided four assists in 17 Bundesliga appearances this season, per WhoScored.com.
His close-ball control and dribbling are impressive for such a young player, and he can be devastating coming off either flank, as you can seen below:
However, it would be a huge call from City to splash more than £40 million on Sane, given that they would be shelling out mostly for his potential rather than his proven quality.
Indeed, it is unlikely that Liverpool would be prepared to match such a figure and take another big risk in the transfer market, especially considering the money they have spent on largely ineffective attackers in recent years, per football writer Nik Postinger:
The Germany international is talented, but if the Sky Blues are prepared to shell out such a huge fee for him, Liverpool are likely going to miss out on their man.
Elsewhere, the Reds could reportedly cash in on Kolo Toure in January after reports emerged of interest from Lazio.
According to Italian outlet Il Messaggero (h/t Uche Amako in the Express), the Roman outfit are keen to add Toure to their squad, having lost Stefan de Vrij and Santiago Gentiletti to injury, and the Reds could look to make some money from the 34-year-old before his contract expires in the summer.
Liverpool's defence has been an issue for some time now, and manager Jurgen Klopp identified it as an area to be addressed as soon as he arrived at the club back in October, per PA Sport (via Eurosport).
He may well look to add new defenders in January, and with centre-back Toure already behind Dejan Lovren, Martin Skrtel and Mamadou Sakho in the pecking order, he is surely an expendable asset.
A new goalkeeper would be another addition that could help Liverpool at the back, as current No. 1 Simon Mignolet is too error-prone to inspire consistent confidence, per Sky Sports Football:
Barcelona No. 2 Marc-Andre ter Stegen was previously mooted as a potential target, but he has now reportedly been valued at £20 million, which is too high a fee for the Reds, per Simon Mullock in the Mirror.
The report adds that Liverpool are prepared to offer £12 million for the 23-year-old German—who would be an upgrade on Mignolet—but Barca want more money if they are to part with the talented Ter Stegen.