Sancho signed a new contract with the German giants on his 18th birthday.
The youngster has been in fine form for the Bundesliga leaders, who are still unbeaten after seven games, after notching eight assists and one goal in 10 appearances this season.
His form was even good enough to warrant a space in the England squad, with Sancho being called up to the squad to face Spain and Croatia during the international break.
Borussia Dortmund's head of licenced player department, Sebastian Kehl, said this new deal was "without a release clause" as a result of interest in the player.
"We are not naïve to not take note of other clubs' interest," he told 'Sky Germany'.
"The lads are doing a grand job right now. And thus, there will always be enquiries for the players we have here.
"Especially for players like Jadon Sancho, who has been invited to the England senior squad for the first time."
Sancho joined Borussia Dortmund from Manchester City.