Reds secure Sahin loan deal
The Reds saw off competition from Arsenal for the Turkey international, who helped Real win the La Liga title last season.
A statement on the club's website read: "The 23-year-old will now undergo a medical on Merseyside."
Sahin will be the fourth new arrival at Anfield following Joe Allen, Oussama Assaidi and Fabio Borini.
The midfielder joined Real last year after catching the eye during a successful spell with Borussia Dortmund, with whom he won the Bundesliga title in 2010/11.
Sahin has also won 31 caps with Turkey, scoring his first international goal aged just 17 against Germany in 2005.