The Athletic first reported the agreement. BBC Sport subsequently confirmed the deal is in place, with the appointment being driven by Liverpool sporting director Richard Hughes — who previously worked with Iraola at Bournemouth and was central to bringing him to English football in 2023.
Iraola is set to bring both of his Bournemouth assistants — Tommy Elphick, 38, and Shaun Cooper — with him to Merseyside. Elphick, a lifelong Liverpool supporter, had already turned down the Bristol City managerial role to keep his options open.
BBC Sport understands Bournemouth have not yet been formally contacted by either man regarding their departure, though Elphick is understood to be eager to make the move.
Iraola guided Bournemouth to sixth place in the Premier League last season — their highest-ever finish — and Europa League qualification for the first time in the club's history. He had announced in April that he would leave at the end of the season.
Arne Slot, whom Iraola replaces, was dismissed last Saturday following an end-of-season review led by Hughes and FSG chief executive of football Michael Edwards. Slot had won the Premier League title in his debut campaign but lost 20 matches across all competitions in his second season — a collapse that came as a surprise to much of the playing squad.
Liverpool are expected to move quickly to complete Iraola's appointment before the World Cup begins on June 11.