The 19-year-old playmaker, who has been the subject of summer interest from the Emirates, will remain at the Bundesliga outfit for at least one further season
The Gunners made an audacious enquiry for the £40 million-rated Germany international on Friday before subsequently switching their attentions to Draxler’s international team-mate Mesut Ozil.
Draxler admitted last week he would be prepared to leave should his club receive a suitable offer but is now certain to stay until next summer at least.
The signing of Kevin-Prince Boateng, who arrived from AC Milan last week in a £10 million deal, was designed to alleviate the growing burden on the 19-year-old’s shoulders after his indifferent start to the new season.
At the Ghanaian's unveiling, Schalke general manager Horst Heldt said that the club would be "schizo" to let Draxler leave, while the player himself has rejected approaches from Chelsea and Borussia Dortmund this summer.
Having missed out on Draxler, Arsenal are now close to finalising a £40m deal for Ozil who has been allowed to leave Real Madrid following confirmation of Gareth Bale’s move to the Bernabeu from Tottenham.
Ozil has agreed personal terms with Arsenal and is currently undergoing a medical in Germany ahead of his club record move.