The Hungary international is said to have agreed a four-year extension following lengthy discussions between Liverpool sporting director Richard Hughes and the midfielder's representatives. An official announcement from the club is expected soon.
The new deal is a major boost for new head coach Andoni Iraola as he prepares for his first season in charge, securing the future of one of Liverpool's most important players.
Szoboszlai enjoyed the best goalscoring season of his career last term, finding the net 13 times in all competitions. His performances earned him Liverpool's Player of the Season award, despite the club ending the campaign without winning a trophy.
Since arriving at Anfield, the midfielder has made 147 appearances, scoring 28 goals and providing 26 assists. His energy, creativity and leadership have made him one of the key figures in Liverpool's squad.
Transfer expert Fabrizio Romano confirmed the agreement on social media.
He said: "Dominik Szoboszlai's new contract at Liverpool has been signed today. All done.
"Agreement until June 2031, Szoboszlai will enter Liverpool's top earners and official statement will follow soon."
Liverpool have already strengthened their squad this summer with the arrivals of Jeremy Jacquet from Rennes and Victor Munoz from Osasuna.
Pep Guardiola has revealed he has no plans to rush back into football after leaving Manchester City, saying he wants to enjoy life away from the game and spend more time with his family.
Youri Tielemans believes the time was right to join Manchester United, saying the club's ambition and desire to compete for major honours convinced him to make the move.
Liverpool head coach Andoni Iraola believes new signing Victor Munoz has everything needed to make a strong impression at Anfield, describing the Spain international as "very hungry and ambitious."
Fiorentina have confirmed the signing of Bournemouth defender Alex Jimenez on a season-long loan, with the Serie A club holding an option to make the deal permanent.
