The Mali international midfielder had seemed poised to join Everton after The Toffees had thrashed out a €7.4 million deal with their Spanish counterparts.
Sissoko was preparing to fly to Goodison Park to put the finishing touches to the deal, but, as had been predicted in some quarters, Liverpool have sneaked in and trumped their Merseyside rivals with a counter-offer.
Rafa Benitez is a confirmed admirer of the 20-year-old having signed him for Valencia two years' ago from Auxerre.
The Reds boss submitted an €8 million offer for the African and Sissoko has decided that a move to Anfield is more appealing.
His agent Jose Segui confirmed the news, telling skysports.com: "Valencia have taken the decision (to sell to Liverpool) and Momo is happier now."
Sissoko is expected to sign a four-year contract with Liverpool and should arrive in England early next week for a medical.
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