The World Cup winner will compete with Eder Militao and Sergio Ramos for a starting role next season.
Raphael Varane has committed his future to Real Madrid, ending Manchester United's hopes of signing the France centre-back.
Varane had previously suggested his future could be away from the Bernabeu, with United making him a top target this summer.
Los Blancos' turbulent season ended with the return of Zinedine Zidane as manager.
And despite the signing of Eder Militao from Porto for €50 million, Varane is content in the capital and will be competing for a starting role next season under his compatriot.
"I am going to remain at Real Madrid next season as I'm sure that we're going to respond in a strong manner," Varane told MARCA.
"This season we fought and tried hard, but we can't blame anything as it's true that we missed that spark in difficult moments, and I haven't been at my best level but we are going to see the best Varane again."
"We have to evolve and Zidane knows that."
"We have to re-build and change things as we look to restart a new cycle."
Zidane will begin preparation for next season imminently, with Real's first friendly on July 21 against Bayern Munich.