Clarke's last job was as assistant toGianfranco Zola at West Ham but his reputation as a coach is built onfour years as assistant to Jose Mourinho at Chelsea.
At Stamford Bridge he helped the Portuguese coach guide the Blues to their first league title in 50 years in 2005 before adding another Premier League the season after along with two League Cups and an FA Cup.
Able deputy: Steve Clarke, who built his reputation as Jose Mourinho's right-hand man at Chelsea, is set to be named as new Liverpool coach
Clarke stayed on at Chelsea under Moruinho's successor Avram Grant and acted briefly as Luiz Felipe Scolari's right-hand man before leaving Chelsea in September 2008 for Upton Park to assist Gianfranco Zola in charge of the Hammers.
The 47-year-old has been out of work since he followed Zola out of West Ham last summer but is expected to be named Liverpool's new first team coach.
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It is understood the Scot will replace Mike Kelly, the former Fulham coach, who is set to follow sacked boss Roy Hodgson out of Anfield.
Clarke should begin his duties at the club's Melwood training ground on Tuesday before taking a seat alongside Dalglish in the dug-out at Bloomfield Road for Liverpool's Barclays Premier League visit to Blackpool.
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Explore more:People: Gianfranco Zola, Mike Kelly, Kenny Dalglish, Roy Hodgson, Luiz Felipe Scolari, Jose Mourinho Places: Liverpool