The 24-year-old has less than six months left to run on his current terms and, having reached an impasse in talks, is expected to leave as a free agent in July.
Bayern Munich and Juventus are understood to be vying for Can's signature, with the latter favourites to win the race, and Neville believes that the Reds will be left with a huge void to fill in the middle of the park.
"The news about Can leaving, for me, I think he's a fantastic player, with personality and character. I think he brings a lot to this Liverpool team in terms of character," he told the Gary Neville Podcast. "That three in midfield and the three up front were brilliant in the first half.
"They set the tone for how you could play against Man City if you've got that energy and ability to know how to press. It's a big blow for Liverpool. It won't make the headlines that [Philippe] Coutinho's sale made. Juventus are a clever club, they sign intelligent players who are shrewd and know the game.
"I know there's a mixed reception on Merseyside to Can in terms of how good he is, and I've even had debates with Jamie Carragher. He looks like he has authority on the pitch, and there aren't many of those characters around in the game."
Neville was speaking after Can produced a fine showing to help Liverpool overcome previously-unbeaten Manchester City 4-3 at Anfield on Sunday afternoon.