Jurgen Klopp’s side welcome the German champions to Anfield for the first leg next Tuesday before travelling to the Allianz Stadium for the return leg on Wednesday, March 13.
The former Anfield defender, a Champions League winner with the Reds in Istanbul in 2005, has kept a close eye on the Bundesliga since playing for and then managing Bayer Leverkusen until 2014.
Bayern have struggled domestically this season and sit five points adrift of league leaders Borussia Dortmund in the table, and Hyypia pointed to the area they are most vulnerable.
“Bayern haven't done that well in their domestic league this season but they are still dangerous,” Hyypia told the Liverpool Echo.
“We cannot afford to underestimate them. We have to go full on in both these games.
“Virgil [van Dijk] will be missed but I'm not too worried. That creates an opportunity for someone else to step up and take more responsibility. There are other players who can take his place.
“We need to be very sharp from the off in the first game. Ideally, you want a lead to take over to Munich.
“I know Bayern quite well and I think their weakness is in defending counter-attacks. We aren't that bad at counter-attacks and I can see us scoring a few goals against Bayern in that manner over the two legs.”
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