Allan will return to Liverpool after Hertha Berlin failed to agree an extension on his loan deal, according to Bild.
The Brazilian spent the season on loan at the Bundesliga club, featuring in 15 league games in defensive midfield as Berlin finished sixth and qualified for the Europa League, 15 points below a Champions League spot.
The 20-year-old is highly-rated and will return to Jurgen Klopp’s side for the summer, but needs to find another European club to join on loan due to work permit issues.
Brazil Under-20 international Allan, who has made six appearances for the national youth side and scored once, has spent spells on loan at Finnish club Seinäjoen Jalkapallokerho and Belgium club Sint-Truidense, but it remains to be seen where he will be playing his football next season.
Liverpool have made too many demands for Berlin to want to pursue a further loan deal, with the Merseyside club eager for Allan to play for the first-team more and wanting a larger fee from the German side.
— Chris Williams (@Chris78Williams) June 12, 2017
Berlin already have 18-year-old Arne Maier as a youth prospect available in Allan’s defensive midfield position, with Maier set to be offered a professional contract this summer, while Liverpool and Berlin will meet during the summer as part of Berlin’s 125th birthday celebrations in an anniversary game at the Olympiastadion in July.
Should Allan prove his worth in the coming years, he would have to battle Liverpool stars like Jordan Henderson, Emre Can and Georginio Wijnaldum for a first-team spot at Anfield.