Real Madrid manager Carlo Ancelotti has told The Sun on Sunday that Raheem Sterling is not a target for the European champions.
Sterling is in talks with the Reds over a new contract, though he has yet to put pen to paper and has been linked with a move to the Spanish capital.
But Ancelotti has dismissed the rumours, saying: "It is clear Sterling is not in our plans."
He added: "Sterling is a player of great quality, certainly one of the best in Europe. But we already have extraordinary talent here.
"Gareth Bale, Karim Benzema and Cristiano Ronaldo are still young -- and we have a talent here called Jese who is even younger.
"He is injured at the moment but already last year he has done things that are extraordinary, so to think of another striker for the Real Madrid attack is really extremely difficult."
Sterling is set to line up for Liverpool against Real on Wednesday in the Champions League, and Ancelotti is wary of the 19-year-old's talents.
"Sterling is strong because he has a specific quality which is pace and controlling the ball at pace which is unique," he said. "In today's football at this level pace is a very important element.
"But I never worry about only one player. I always think I have to play against a team."