The Reds head into the game looking to gain revenge for their 3-1 defeat by the Red Devils at Old Trafford back in September.
United boss Van Gaal has found himself under intense pressure in recent weeks following his side’s stuttering form.
Manchester United have only won three of their last 10 Premier League games and are currently in sixth place in the table heading into Sunday’s showdown.
Liverpool warmed up for Sunday’s game on Merseyside by playing out a thrilling 3-3 draw with Arsenal in front of their home fans in midweek.
United, meanwhile, were twice pegged back as they drew 3-3 with Newcastle United on Tuesday night.
Former Arsenal man Nicholas is tipping Liverpool to come out on top in Sunday’s crunch clash at Anfield.
Nicholas told Sky Sports News HQ: “This is simply one of the biggest games in world football.
“Both these sides are struggling and they are learning that possession in the Premier League isn’t king but goals are.
“I like Jurgen Klopp and all his fist pumping and he seems to like these big games and gets big results, there’s just something about him. I can see Liverpool winning and further isolating Louis van Gaal’s position as United boss.”
MORE: Man United latest news
MORE: Arsenal latest news
MORE: Chelsea latest news
MORE: Liverpool latest news