The 23-year-old has been one of Sporting's key players this season, scoring 13 goals and registering 18 assists in all competitions so far.
Despite having been capped just four times for Portugal, Fernandes is believed to be firmly in contention to secure a place in Fernando Santos's squad for the World Cup this summer.
According to Portuguese outlet O Jogo, Liverpool have been monitoring Fernandes's progress this season and have been impressed with his performances in the Europa League.
The report goes on to claim that Anfield officials have been meeting with the player's representatives to discuss a potential transfer this summer.
Fernandes is in his first season at Sporting, having moved in a £7m deal from Sampdoria last summer.