The Reds view the 22-year-old as an ideal replacement for Divock Origi, who looks set to leave Merseyside this summer.
According to Voetbal International, Liverpool are currently in pole position to sign Donyell Malen but will face heavy competition from Barcelona.
Donyell Malen joined PSV's youth set-up in 2017 before making his debut for the senior team in 2018. He became a regular member of PSV Eindhoven's starting XI in the 2018-19 season, during which he made 42 appearances and scored 11 goals.
The forward enjoyed a breakout campaign last season, during which he scored 17 goals in 25 appearances for the Dutch side. His impressive form earned him a call-up to the Netherlands national team, for whom he has made eight appearances and scored two goals.
Donyell Malen has maintained his scintillating goal-scoring form this season, tallying 23 goals in 39 appearances for PSV in all competitions. His consistent performances have caught the attention of a number of Europe's top clubs.
Liverpool are desperate to sign a forward this summer. The Merseyside giants have struggled in front of goal this season, with a number of the club's key players suffering from a lack of form.
Barcelona are also rumored to be interested in Donyell Malen. Ronald Koeman will be eager to bolster his attacking options in the summer as his side continue their transitionary phase.
Liverpool will look to edge out Barcelona to the signature of Donyell Malen
Liverpool forward Divock Origi is well-known for his ability to score goals in big games. The Belgian scored a double against Barcelona in the semi-finals of the UEFA Champions League in the 2018-19 campaign.
Origi has often been used as an impact substitute by Jurgen Klopp. However, the forward has reportedly grown frustrated by a lack of playing time this season. He has made just 9 Premier League appearances for the Reds this season.
Origi is reportedly looking to seal a move away from Anfield this summer, and Klopp will look to replace him with Donyell Malen.
Meanwhile, Ronald Koeman will reportedly try to use his Dutch connections to convince Malen to join him at Camp Nou. Barcelona are, however, struggling for funds at the moment and might not be able to afford a move for the PSV Eindhoven star.