Fenway Sports Group (FSG), the Reds’ American owners, made contact with Wigan boss Martinez last week through third parties and sources have described the Spaniard as the hot favourite to take over at Anfield after Dalglish was sacked on Wednesday.
As revealed by Goal.com in April, Martinez has already decided to leave Wigan this summer and, despite Latics owner Dave Whelan denying that an official approach has been made, Liverpool are now expected to make a formal move for the 38-year-old, who is also on Aston Villa’s shortlist.
Former Chelsea manager Andre Villas-Boas is also under consideration as John W Henry, Liverpool’s principal owner, targets a younger and more progressive manager to mount a challenge for a top-four finish next season.
Martinez guided the Latics to safety in the Premier League this season following a stunning run of form towards the end of the campaign that included victories over Manchester United, Arsenal, Newcastle and the Reds themselves.
He has been continually tipped by Whelan to manage at the highest level and feels ready to make the next step in his career after turning down the opportunity to take over at Villa a year ago.
Villas-Boas was sacked by Chelsea in March but still has a reputation as one of the most promising managers in Europe and is the leading candidate for the vacant managerial position at Italian side Roma.
But Martinez is in pole position to land one of the most prestigious jobs in English football after Liverpool legend Dalglish following the club’s poor performances in the league this season.
The Scot met the owners in Boston earlier this week but could not save his job after 16 months back at the helm, with FSG particularly frustrated with Liverpool’s failure in the transfer market having spent £110 million on new players. It is believed that Henry and chairman Tom Werner had been leaning towards sacking Dalglish for several weeks and have been considering potential replacements.
The Reds won the League Cup and reached the FA Cup final, but could only finish eighth in the league, 37 points behind champions Manchester City.
Dalglish was left in a vulnerable position following the dismissal in April of director of football Damien Comolli as FSG underwent a major restructuring of the club.
“Results in the Premier League have been disappointing and we believe to build on the progress that has already been made, we need to make a change,” said Werner in a statement on Liverpool’s official website.
"We are committed to delivering success for our supporters and our ambition remains resolute to return this great Club to the elite of England and Europe, where it belongs."