The Dortmund chief is eager to see the Germany international sign a new deal at Signal Iduna Park and has no regrets over making Robert Lewandowski stay
The Germany midfielder has 18 months left on his contract and has been closely linked with a move to the likes of Real Madrid and Manchester United.
And Watzke says he wants to know whether the former Nurnberg man will remain at Signal Iduna Park sooner rather than later so he can plan for the future.
"We are talking to Gundogan's family, who act as his advisors," he told SZ.
"Obviously, we want to keep Ilkay but there is no agreement so far. At the end of the day, only he can decide whether he wants to continue his development with us.
"He knows, though, that we expect a decision from him soon."
BVB kept hold of Robert Lewandowski in the summer, despite the Polish striker entering the final year of his contract and Watzke does not regret refusing to sell him to Bayern Munich.
"It was absolutely right. He scores important goals for us, works incredibly hard and is a player we couldn't have replaced in the summer, with our financial capabilities."
Watzke also hinted that Lewandowski's eventual replacement when he leave on a free in the summer could already be at the club.
"To my knowledge, he wants to go to Bayern Munich. We're scanning the market closely, you can't buy a straight replacement for a special player like Robert.
"Incidentally, we have [Marco] Reus and [Pierre-Emerick] Aubameyang, who both played as strikers at their old clubs."