The 36-year-old has taken a 'significant wage cut', rejecting a few other offers to remain with the Reds. The Englishman had offers from two Premier League clubs and one Major League Soccer club. The announcement of Milner's new contract is likely to take place this week.
Joining the Reds from Manchester City in 2015, Milner has contributed 26 goals and 44 assists in 289 games across competitions. The veteran has continued to perform at a high level, making 39 appearances last season. He is also extremely versatile, having played in central and defensive midfield, as well as at right-back over the years.
Milner has lifted six trophies with the Merseysiders, including a Premier League title and a Champions League trophy. Last season, he added the Carabao Cup and FA Cup to his collection but fell short in the UEFA Champions League final against Real Madrid.
Manager Jurgen Klopp was adamant to keep Milner at Anfield, with the Englishman's previous contract expiring this summer.
Milner has a stellar Premier League resume; he has made the fourth-most appearances (588) in the competition. Debuting in 2002 with Leeds United, he has also played for Newcastle United, Aston Villa and Manchester City.
He is joint-eighth in the competition's all-time assists leaderboard, along with Kevin De Bruyne (86). Milner was recently awarded the MBE in the Queen's Birthday Honours.
James Milner on why he joined Liverpool
After the Reds beat Chelsea on penalties in the FA Cup final on May 14 at Wembley, Milner shared why he joined them from City. The Englishman joined City in 2010 from Aston Villa and won two Premier League titles and an FA Cup.
Milner said that he wanted to help the Merseysiders win trophies as well. He said (via Liverpool Echo):
"That’s why I came here. That was the hope; it was part of the drive. When I went to City, they hadn’t won anything for a long time, and it was great to be part of that, the start of their success, winning leagues and cups."
"Liverpool is an incredible club with incredible history, but it hadn’t been as successful, hadn’t won the Premier League, which was baffling. That was the aim, and if we could do that, win a Premier League here, that would be special. It’s a process, and the process has been incredible."