The Brazil international is understood to have moved ahead of Paris Saint-Germain centre-back Mamadou Sakho, Ashley Williams of Swansea and Ajax star Toby Alderweireld in Brendan Rodgers' wish-list for a new centre-back this summer.
However, they may have their work cut out to secure a deal for him if the Italian giants pursue their interest in a stopper who is valued at around £15m.
Dede's representative Giuliano Aranda is well aware of the Reds' admiration for the 24-year-old but he has denied suggestions that discussions have already taken place about a possible deal.
Aranda said: "There is interest from Liverpool, but there have been no talks between me and that club."
Milan therefore would appear to be ahead of the Anfield club at this stage as Aranda goes on to confirm that contact has been made between the two clubs, although he added that Vasco are still waiting for a firm offer.
Juventus, Benfica, Manchester United and Valencia have also checked out the 6'3" star, and while he is in no rush to leave his Brazilian club, Vasco's financial problems may force his hand.