The Colombian international has been on the radar of top clubs in Europe, with the latest being Bayern Munich.
The Bavarians are known to be actively searching for a left winger, and the 26-year-old Colombian was reportedly on their list of potential targets.
Liverpool turn down Diaz's move
However, Sky Sports reports, via Sportal, that Liverpool informed Bayern's sporting director, Hasan Salihamidžić, that Diaz is not for sale.
The English club made it clear to Bayern's representatives that they have no intention of entering into discussions about the player, effectively nipping the German giants' inquiry in the bud.
Diaz's future has been the subject of much speculation, with the player previously linked to Barcelona. The Colombian had a strong season for the Merseyside club, scoring 17 goals and providing 8 assists in 50 appearances across all competitions.
This represents another potential transfer setback for Bayern, who reportedly lost out to Liverpool in the pursuit of Florian Wirtz, while Nico Williams appears to prefer a move to Barcelona.