Renato Sanches will remain at Bayern Munich for the rest of 2018, according to a report in German publication kicker on Thursday which has been confirmed by ESPN FC.
A proposed one-season loan deal to Sanches' former club Benfica has broken down because the Portuguese giants were reluctant to pay a loan fee. As a result, the 2016 Golden Boy award winner is set to stay in Munich.
Bayern CEO Karl-Heinz Rummenigge told Merkur last month that incoming coach Niko Kovac would work with Sanches, who is under contract until 2021 at Bayern, to try and restore the midfielder to the form that saw a host of top European clubs chasing his signature.
"Renato is coming back," Rummenigge said. "Niko Kovac will try to restore him to former strengths -- it's an exciting task."
Sanches, 20, was voted best young player at Euro 2016 as Portugal won the tournament, before Bayern beat Manchester United to sign him from Benfica for an initial €35 million.
This transfer fee could have eventually risen to €80m with add-ons. However, Sanches only started six Bundesliga games under Carlo Ancelotti in his debut season of 2016-17, failing to score or provide an assist in 25 appearances in all competitions, while completing 90 minutes on just a single occasion.
In an effort to boost Sanches' confidence and increase playing time after a difficult first season in Germany, Bayern allowed him to go out on loan last summer.
At the time, his signing was hailed as a coup for Swansea and their then-manager Paul Clement -- Ancelotti's former assistant at Bayern. However, Sanches endured "a very bad season" on loan at the relegated Premier League side, failing to score or provide an assist in 15 appearances and he didn't feature at all since the end of January after struggling to overcome a hamstring injury.