Iraola is the clear favourite to replace Arne Slot following Liverpool's bold call to sack the Dutchman.
The Reds ownership thanked Slot for his service to the club across the last two years on Merseyside including a Premier League title in his first season in charge.
Finishing fifth at the end of 2025/26 drew major criticism of Slot's tenure, with the Liverpool fan base split over his continuation this summer, as Mohamed Salah and Andy Robertson move on as free agents.
Despite appearing ready to stick the former Feyenoord boss, Fenway Sports Group (FSG) have now performed a U-turn, as thoughts turn to who will replace Slot.
Iraola's impressive rise at Bournemouth, including leading the Cherries to a first-ever European qualification, has attracted attention from across Europe and Liverpool will need to move quickly to secure the Spaniard.
If the former Rayo Vallecano boss opts for a move to Merseyside, he is rumoured to be considering several of his Bournemouth stars to join him, including teenage sensation Junior Kroupi.
The France U21 international enjoyed a superb debut campaign under Iraola, netting 13 Premier League goals, as the highest scoring teenager in a single season across EPL history.
Kroupi is under contract at the Vitality Stadium until 2030, but his transfer value is set at around £45m, which would fall within Liverpool's budget following Salah's exit.
Rayan is also a rumoured option, but Bournemouth are less willing to sell the Brazilian, so Alex Scott and Marcos Senesi could be more attainable targets for Iraola.
Bournemouth are yet to make progress on extending Scott's current contract beyond 2028, and after featuring in 37 of Bournemouth 38 top-flight games last season, he's clearly highly-rated by Iraola.
A fee for Scott could reach £35m, but Senesi is available as a free agent following his contract expiry, but Iraola would need to fight off interest from Chelsea and Tottenham.