The Morocco international will not be recalled from his loan spell in the German top-flight ahead of the 2019-20 season.
Real Madrid manager Zinedine Zidane has confirmed Achraf Hakimi will remain at Borussia Dortmund to complete his two-year loan deal.
Hakimi joined Dortmund temporarily last June from the Santiago Bernabeu and the deal is expected to run through until the summer of 2020.
The Moroccan full-back dazzled in Lucien Favre’s team last season. He scored two goals and created seven assists in all competitions, including his hat-trick of assists in a Uefa Champions League game against Atletico Madrid.
A metatarsal break prematurely ended Hakimi’s debut season in the German Bundesliga after making 21 appearances.
Before Real Madrid’s 3-1 loss to Bayern Munich in Sunday's International Champions Cup, Zidane said the Signal Iduna Park is a good platform for the 20-year-old to continue his development.
"Achraf will spend another year in Dortmund," Zidane was quoted by Bundesliga website.
"He's a good player - we all know that - but it's good for him to stay there and get another year of match practice behind him."
In October 2017, Hakimi had his first-team breakthrough under Zidane and went on to score two goals in 17 appearances for the Madrid giants. He was also a member of the 2017-18 Uefa Champions League winning squad.
After playing for Morocco at the 2019 Africa Cup of Nations, the versatile defender is on an extended break and yet to join Dortmund for their pre-season training.