The Blues had hoped to bring the German legend to Stamford Bridge to replace Kepa Arrizabalaga this summer.
Neuer, 34, was expected to quit Bayern this summer after the club controversially brought in Alexander Nubel as his long-term replacement in January.
But the German’s new deal will see him surely end his career at the Allianz Arena – as he will be aged 37 by the time his deal expires.
On the news, CEO Karl-Heinz Rummenigge said: “FC Bayern are very happy Manuel has extended his contract until 30 June 2023.
“Manuel is the best goalkeeper in the world and our captain.”
Sporting director Hasan Salihamidzic added: “The contract extension is an important sign for FC Bayern as well as for Manuel.
“Together we have created a win-win situation. That’s what was very important to Manuel and to us.
“Manuel stands for the continuous success of FC Bayern, for responsibility and world-class standards.
“I am delighted about our continued work together.”
While everyone seems to be singing from the same hymn sheet now, in January it was a very different story.
Neuer even threatened to quit, according to some reports in Germany, after they brought in Nubel.Sporting director Salihamidzic is said to have run the prospect of Nubel playing 15 games next season by the German World Cup winner.
But Neuer reportedly replied: “Out of the question.
“As long as I am here, I will play every game, regardless of the competition, and even every friendly match.”
Chelsea had seen their chances of landing a top-quality goalkeeper massively lifted after the news, with Kepa struggling to live up to his £71.6million price tag.
But now it seems they will have to turn their attention elsewhere – with Willy Caballero potentially taking the No1 spot after signing a new one-year deal at the club.
Source: thesun.uk.co