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The 17-year-old midfielder has a £43m release clause with the Spanish giants, but is set to sign a new contract when La Blaugrana repair their financial issues.
The Reds were prepared to meet the clause but have now switched their attention to Leeds United’s Kalvin Phillips.
Gavi broke through the La Masia academy this campaign, featuring 34 times this season in La Liga.
He played 50 matches this season and broke into the Spain squad, with his most recent involvement seeing him pick up man-of-the-match in a 1-1 draw with Portugal.
Upon the renewal of his contract, his release clause is set to rise to £860m (€1bn), the same as his senior teammates who have recently agreed to fresh terms, including Pedri, Ansu Fati, Ronald Araujo and Ferran Torres.
The report also states that Gavi's representatives have had the proposal to renew his contract for some time. "His representative has had the renewal offer on the table for a long time. We have no news that he has accepted it," Barca president Joan Laporta recently said.
Phillips has had a tough time of things recently, spending the majority of this season on the sidelines at Elland Road.
He missed almost half the season as Leeds just about stayed in the Premier League - but his exploits from the previous season and in an England shirt have alerted several top-level clubs including Manchester City and Manchester United.
He would likely cost between £50-60m, but Jesse Marsch will be keen to keep him around in Yorkshire.
The Reds are set to lose several players this summer amidst a potential mass exodus, but their midfield looks to be the strongest in terms of numbers, so it will be very interesting to see how Jurgen Klopp moves this window.
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