The club announced the news on their official website. Per the report, the 36-year-old will start the next chapter in his career in February, giving him the opportunity to enhance his skills as a coach.
The 36-year-old is looking forward to his new role:
"It feels like completing the circle; returning to the place where professionally it all began. However, this isn't a decision based on emotion - it's about what I can offer and contribute to Liverpool.
"I don't think I need to explain to people what this football club means to me, but when I knew coming back was a serious option I wanted to make sure it was a substantive role and a role in which I could really help the organisation.
"Meeting with Alex Inglethorpe, seeing the work they are currently doing and want to do in the future at Kirkby, it just felt right. The right option at the right time, for all parties involved."
Gerrard was a product of the Liverpool academy system, making his debut for the senior team in 1998 and becoming one of the finest players in Reds history. He moved to LA Galaxy in 2015 and ended his playing career one year later.
Since he hung up his boots, a return to Anfield has been discussed by fans and pundits alike. The former England international always stood out for his high football IQ and knowledge of the game, and a move to coaching seems a logical next step.
Per the report, academy director Alex Inglethorpe is ecstatic he'll get to work with the club legend:
"If I was to pick one individual who embodies the characteristics and values we are looking to instil into our organisation at Kirkby, it would be Steven Gerrard. For him to have been so enthusiastic about being part of what we are looking to do is simply great news for everyone connected to the club.
"I don't think it would surprise anyone to know that Steven has had a host of great options, in terms of what to do next in his career, including playing, management and coaching. But it's been evident from the first meeting with him that his heart and head belongs here."
As an Anfield legend and one of the best products ever to emerge from the academy, Gerrard's presence should do wonders for the players. The former Reds captain has seen it all and will be able to advise the youngsters on how to make the most out of their career every step of the way.
At the same time, Gerrard's new position should teach him much about coaching a team, allowing him to develop his managerial abilities at his own pace.
With Jurgen Klopp finding plenty of success as Liverpool's first-team manager, the Reds are in no hurry to groom a successor, but it would be a fairytale ending to one day see Gerrard take the reins at the club himself.