With Julian Ward leaving Liverpool this summer, the club are in need of a new sporting director ahead of the summer transfer window.
The club have been in talks with Schmadtke over coming in and filling that role but that is not going to happen permanently for now.
The 59-year-old will be joining Liverpool in the coming weeks but only as a transfer consultant on a short-term contract.
According to German daily Bild, the German will start in his role at Anfield on 1st June as part of the deal.
He has agreed to sign a three-month contract and help Liverpool oversee the summer transfer window.
Schmadtke left his role as sporting director of Wolfsburg in January and also previously worked at 1.FC Koln and Hannover 96.
He has not ruled out a longer stay at Liverpool and it will be discussed once his initial three-month contract expires.