Foot Mercato reported on Monday that Diomandé has communicated his willingness to move to the Parc des Princes this summer, with PSG sporting director Luis Campos having held multiple meetings with Leipzig over a potential deal.
A fee is the remaining obstacle, with Leipzig demanding in excess of €100m and some reports suggesting they could hold out for as much as €150m.
Fabrizio Romano confirmed that both PSG and Liverpool are "in talks with Yan Diomandé's camp," adding that the final decision rests with the player and RB Leipzig, who are in a strong negotiating position with the forward contracted until 2030.
Diomandé himself has not been subtle about his ambitions. Speaking to So Foot magazine ahead of the World Cup, he said: "I'm not going to say Paris, Liverpool or Real Madrid. But it would be a good idea to play for big clubs. Everyone has ambitions and every day you want to go higher."
He arrived at Leipzig from Leganés last July for €20m and has since produced one of the most impressive debut seasons by a teenager in the Bundesliga — 13 goals and nine assists across 36 appearances, winning the award for the competition's best young player.
Liverpool's need is the more pressing of the two clubs. Mohamed Salah has left Anfield and incoming manager Andoni Iraola requires a wide player of similar profile as his primary summer target. Liverpool had been considered the frontrunner in earlier reports, but Diomandé's verbal approval of a PSG move has complicated that picture significantly.
The player is understood to be less enthusiastic about a move to Bayern Munich, who have also registered interest.
Whether the deal goes to PSG or Liverpool will largely be determined by which club moves first and most decisively on Leipzig's valuation — a figure that shows no sign of dropping.