The Germany international star will remain at the Santiago Bernabeu, unlike Mesut Ozil, his representative Jorg Neubauer confirms ahead of the summer transfer deadline
The Germany international faces tough competition for a position in the midfield with the likes of Asier Illarramendi, Casemiro, Luka Modric and Xabi Alonso at the Santiago Bernabeu.
However, his representative says that Khedira, whose contract at the Spanish capital will expire in 2015, will stay with Carlo Ancelotti's side for now.
"Sami will remain at Real Madrid, just as we have always said," Neubauer told Bild.
"I have no idea who these people are that have fun straying those kind of rumours. It's simply annoying and doesn't do Sami any good."
Reports in Spain had previously suggested that the 26-year-old, who has recently been linked with Jose Mourinho's Chelsea as well as Ligue 1 giants Paris Saint-Germain, might be looking for a way out.