After initially missing out on the winger on deadline day in January, the Reds are set to complete the signing of Carvalho.
It is thought that the 19-year-old will sign a five-year contract with the club.
Should the teenager join another English side at the end of this summer, continental clubs would only need to pay a nominal fee, while the compensation set by a tribunal would be for the current deal.
Reports suggest that Carvalho has already undergone a medical with his current club and that they will allow him to leave.
The deal for Carvalho fell through after the Premier League side ran out of time.
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The Championship leaders were set to sign Carvalho and loan him back to the Cottagers for the rest of the season, but he remained with them anyway.
In addition to scoring seven goals for Marco Silva's side this season, he also found the net in the FA Cup defeat to Manchester City.
The compensation fee for a 16-year-old was paid by the club in February 2021. If add-on clauses are met, Cottagers could receive a fee in the region of 4 million dollars and have a substantial sell-on clause.
The Cottagers are currently 11 points clear of Bournemouth at the top of the Championship table, and they want to return to the top flight.
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