The 22-year-old midfielder will join Spurs at the end of the season after previously indicating his preference for a move to White Hart Lane over other suitors like Liverpool.
Goal.com revealed on Friday that the 22-year-old favored a move to Tottenham ahead of Liverpool, which had also been pursuing his signature for a number of months, and Tottenham made the official announcement on its website.
Holtby had also previously been tracked by Arsenal, but Spurs have now revealed that the German U-21 captain will sign for the North London outfit in July, subject to a physical. Holtby's move will see him leave Germany for the first time after spells with Alemannia Aachen, Bochum, Mainz and Schalke.
The midfielder has made 75 appearances in all competitions for Schalke and has scored 11 times for the club. He has also earned three caps for the senior German national side.