Neven Subotic has prolonged his contract at Borussia Dortmund until 2018, while the club has confirmed that Ilkay Gundogan will be leaving this summer.
Subotic, 26, confirmed a new long-term deal until 2018 via his Instagram account on Wednesday, committing himself to the club he joined in 2008.
Sources told ESPN FC in March that Arsenal were weighing up a move for the Serbia centre-back this summer, while other top European clubs were also hopeful of signing the defender with his previous deal due to expire in 2016.
However, on Tuesday ESPN FC was told that Subotic has agreed a new deal with Dortmund ahead of this weekend's DFB Pokal final with Wolfsburg, with BVB confirming the contract on Wednesday.
- Borussia Dortmund (@BVB) May 27, 2015
"Dortmund has long become my second home," Subotic, who has featured in 186 Bundesliga games in the last seven years, told the club's official website.
Sporting director Michael Zorc added: "Neven came here as very young lad. He has grown into a genuine Borusse [a member of BVB] on and off the pitch. We are convinced he will be a mainstay for us next season."
The Serb is on his way back to finding the form that made him one of Europe's best defenders prior to an anterior cruciate ligament tear in November 2013.
Subotic featured in 28 Bundesliga games and scored two goals this season, while adding another goal in a total of 11 appearances in the German Cup and the Champions League.
Subotic's teammate Mats Hummels last week opted to stay at Dortmund for at least one more season amid heavy interest from Manchester United, while BVB signed versatile Bayer Leverkusen midfielder Gonzalo Castro earlier this week.
Incoming coach Thomas Tuchel will, however, have to plan without Germany international Gundogan, with BVB CEO Hans-Joachim Watzke confirming in Sport Bild today that the holding midfielder -- also linked with a move to Old Trafford -- will leave this summer.
Meanwhile, former BVB coach Ottmar Hitzfeld has urged outgoing Jurgen Klopp to take a sabbatical before returning to the dug-out, as the city of Dortmund hopes for one last emotional goodbye to the manager on Sunday.
Klopp, 47, will be in charge of Dortmund for the last time on Saturday for the DFB Pokal final in Berlin. The coach has yet to make a decision on his future, and last week said that he has not yet talked to other clubs.
Reports in Germany this week suggested the coach will take a break from football for at least six months -- an idea backed by former BVB and Bayern Munich boss Hitzfeld.
The 1997 Champions League winner with Dortmund -- who took charge of Bayern Munich in 1998 one year after leaving the BVB dug-out -- took a break from coaching in 2004, and returned to the Allianz Arena for a second stint in February 2007.
"I would advise him to take a breather," said the 66-year-old, who coached Switzerland at the 2014 World Cup and then retired. "It did me good back then. After that he can coach every big club."
Should Dortmund beat Wolfsburg on Saturday, BVB are set to parade the trophy through the streets of the Ruhr-Area town the following day.
Local outlet Der Westen reports that the city expects some 250,000 people to attend the parade, which would start at 14.09 local time on Sunday -- a nod to Dortmund's founding year of 1909 -- should BVB win the trophy.