Bundesliga side Schalke have activated Matija Nastasic's club release clause which sees the defender sign on a permanent deal.
The 21-year-old left Manchester City in January join Die Knappen on loan and has since accumulated enough game-time to trigger the player's transfer clause.
And Nastasic has expressed his delight at his move and is hopeful of a successful spell Gelsenkirchen.
"I am proud and happy that I remain at Schalke," Nastasic told the club's official website.
"The team did very well and took to me from day one, I was immediately part of the team.
"In the future I would like to help us achieve our goals as a team."
The news comes after Schalke chief Horst Heldt recently expressed interest in keeping Nastasic at the club on a permanent basis.
Signed by then Manchester City boss Roberto Mancini in 2012, Nastasic went onto make 51 appearances in total for the Etihad outfit, including 34 Premier League appearances.
However, the central-defender only managed to make a single appearance under Manuel Pellegrini this term before being shipped out on loan to Schalke, where he has since made nine appearances in all competitions and featured in the club's last-16 tie against Real Madrid.