The former AC Milan player has invested heavily in Gallagher's clothing line Pretty Green, according to The Sun.
The friends, who met on an Oasis tour of Europe, aim to mould the business into a leading fashion house.
A source said: "Paolo has had a long and distinguished football career and is starting to consider hanging up his boots for good. He has been looking into investment opportunities and Pretty Green came up in a conversation when Liam announced the big launch in London last year.
"A lot of work has gone on behind the scenes over the past month to make it happen but the money has now been agreed which will take Pretty Green to the next level."
Further investment in the firm has come from Wall Street backers, while Gallagher has also injected some of his own cash into the business.