The 25-year-old captain made his move after Liverpool rejected a £32m bid from Premiership champions Chelsea.

A Liverpool club statement read: "The club has made it crystal clear we want to keep Steven at Anfield.

"Sadly, he has told us that he will not accept our offer of an improved and extended contract because he wants to leave," the statement added.

Reports from Anfield suggest the club will not allow Gerrard to leave until he has submitted a formal transfer request.

Gerrard delivered the news to Liverpool chief executive Rick Parry via his agent, Struan Marshall.

And Parry said: "We desperately want to keep Stevie and we've told him we don't want him to leave. However, in rejecting our offer of a new contract he has indicated he wants to go."

Gerrard has two years left on his current contract which is worth a reported £60,000 per week.

He was in talks with the club to extend that deal by a further two years until Monday when his agent announced that negotiations were ending and were "unlikely to be re-opened".

That apparently came because Gerrard felt his boyhood club had not placed enough of a priority on the talks.

Later on Monday Gerrard had a meeting with chief executive Parry and chairman David Moores, who made a last-ditch offer of £100,000-per-week to keep their captain at Anfield.

They were told he would go away and sleep on the deal -- but he told Parry on Tuesday he wanted to leave.

By then Chelsea had already made their offer -- which is now set to become only the start of a bidding war between the London club and Spanish giants Real Madrid.

Madrid confirmed their interest on Tuesday but said he would have to put in an official transfer request before they got involved.

Gerrard's confirmation that he did indeed want out would be sure to bring the Bernabeu club to the negotiating table.

The previous British record buy was set at £29.1m when Manchester United bought Rio Ferdinand from Leeds in 2002.