Liverpool have agreed to splash out a British record transfer fee of £110m to beat Chelsea to the signature of Brighton midfielder Caicedo.
The Ecuadorian will be undergoing a medical at Liverpool later today ahead of signing a long-term contract with the Merseyside giants.
He will become the second player from Brighton to join Liverpool this summer following his former team-mate Alexis Mac Allister.
Carragher admitted that Liverpool had to agree to pay the big money as the Seagulls knew that they were desperate to sign a defensive midfielder.
However, he feels that the club have done a brilliant job of replacing an ageing and tired midfield this summer.
The former Red took to Twitter and wrote: “Delighted to wake up to the news on Caicedo.
“Liverpool had to pay big money as clubs knew they were desperate.
“But signing two top young players from Brighton for £145m and selling two of your own older players for £52m is great business!!”
It remains to be seen whether Caicedo’s arrival will end Liverpool’s pursuit of Romeo Lavia in the ongoing transfer window.