Palsson was spotted by the Reds’ scouts, despite never having made a first-team appearance for the Danish club.
“First of all, I am happy on Victor’s behalf,” stated AGF sports director Brian Steen Nielsen in a press release.
“It’s a great opportunity for him and naturally, we don’t want to block the way for him.
“Of course, we regret to lose a talented player, but on the other hand, we have got a good deal with Liverpool.”