Gundogan in u-turn signs new contract with Dortmund

The 24-year-old- a member of the Dortmund side that clinched the domestic double in 2012 -- had been linked with a move to champions Bayern Munich, who have prised away several of their big stars in recent years, when he refused to sign an extension beyond 2016 at the end of April.

However, according to German media that deal fell through over Gundogan's wage demands.

"I am happy that the way has been cleared for me to continue to play for Borussia Dortmund," said Gundogan on the website.

"I am going to immediately concentrate fulltime on getting ready for next season, as in August we want to be primed to go straight on the attack."

Dortmund endured a tough season last term, after several years of success under charismatic manager Jurgen Klopp.

They failed to secure a Champions League berth and lost in the German Cup final which was Klopp's last game in charge as he announced before the end of the campaign he was stepping aside -- he has been replaced by Thomas Tuchel.