Former Liverpool and Real Madrid midfielder Xabi Alonso is set for a surprise retirement from football at the end of the season, when his Bayern Munich contract expires.

The 35-year-old, a World Cup and twice European Championships winner with Spain, has not signed a new contract with Bundesliga champions yet, despite fellow veteran Arjen Robben already putting pen to paper.

Alonso joined the Bavarian club in 2014 from Real Madrid and is into his third season with the club, and German daily Bild report it will be the midfielder’s last.

Alonso reportedly met with Bayern’s management towards the end of 2016 and announced his plans to retire at the end of the current campaign to the club’s hierarchy, despite still being a regular in Carlo Ancelotti’s side, starting 13 of their 16 Bundesliga games so far.

Bayern are keen for him to continue and neither party has announced the decision.

He is a fan favourite at the Allianz Arena, having won two Bundesliga titles, the German Cup and the German Super Cup.

The Spaniard made his name at Liverpool after arriving from Real Sociedad and won the Champions League, Uefa Super Cup and the FA Cup as part of a formidable midfield partnership with Steven Gerrard.

Alonso scored the equaliser in Liverpool's famous Champions League win in Istanbul in 2005 (Getty)