Berlin - Schalke 04 have signed Serbian defender Matija Nastasic on a long-term contract until 2019, making permanent his loan move from Manchester City, the Bundesliga club said on Wednesday.
"I am proud and happy to remain a Schalke player," the 21-year-old said in a club statement.
The deal comes a day after Schalke beat Real Madrid 4-3 in the Spanish capital but missed out on a Champions League last eight spot after their 2-0 loss in the first leg.
The tall defender joined City as a teenager in 2012 on a five-year deal but was unable to force his way into Manuel Pellegrini's side.
Nastasic made one appearance for City this season, in the 3-0 Community Shield defeat by Arsenal in August.
He joined Schalke in January on an initial loan deal.