Sahin agreed an 18-month loan to the Schwarz-Gelben when he returned to Dortmund in January 2013, but will officially become a BVB player again this summer, the club confirmed on Thursday evening.
"We met with Real Madrid officials when the two clubs played in the Champions League quarter-finals recently, and we have made it clear to them that we intend to make use of the option to buy," said Borussia CEO Hans-Joachim Watzke to local newspaper Ruhr Nachrichten. No further details concerning the transfer have been disclosed.
After breaking into the BVB team as a teenager, Sahin helped Dortmund to the league title in 2010/11, before leaving for the Spanish capital that summer. He struggled for playing time with Los Merengues, however, and was loaned back to Dortmund at the beginning of 2013 having spent the previous six months at English Premier League side Liverpool FC.
He has been an ever-present in Jürgen Klopp's team this season, playing in every one of the club's 29 league games so far, scoring twice and providing three assists.