Manchester United and Arsenal have suffered a blow in signing Ilkay Gundogan after the midfielder committed his future to Borussia Dortmund by signing a new contract.

The German international had one year left on his earlier deal at Signal Iduna Park and had publicly expressed his desire to leave his current employers in the summer transfer window. This had alerted several clubs in England and abroad as they were interested in securing his services.

The Daily Mail had reported that Arsenal were looking to hijack United's move for Gundogan. The 24-year-old's agent also admitted that Dortmund's league rivals Bayern Munich and treble winners Barcelona were also in the hunt for his client's signature.

However, Gundogan has snubbed the chance to join either of the clubs by signing a new two-year extension. The new deal will keep him at Dortmund until June 2017.

"Borussia Dortmund can continue to count on midfield player Ilkay Gündogan. On Wednesday [1 July] the 24 year old extended his contract early until the 30 June 2017 with the eight time German Champions," a statement on Dortmund's official website read.

The midfielder is now looking forward for the pre-season preparation for the upcoming campaign.

"The first days of preparing for the new season are over and it is a lot of fun to work with the coaches and my team mates," Gundogan explained.

"I am happy that we have sorted this out at last and I will continue to play football for Borussia Dortmund. My focus right from now is totally geared to our preparations, after all, we want to go all out for attack in August."

Dortmund sporting director Michael Zorc is delighted that the ongoing saga surrounding Gundogan's future has ended.

"We are happy that Ilkay will continue to be playing for Borussia Dortmund. I am convinced that he will play his part so that BVB will reach their sporting targets," Zorc said.