The midfielder has revealed he was the subject of a late offer from the Red Devils but that Real Madrid rejected the deal.
The Germany international revealed that the Spanish club snubbed an offer from the Premier League champion and that has been told by Madrid boss Carlo Ancelotti that he has a place in the side this season.
"Real Madrid rejected the offer, so it's over. There was no need to hold talks. I had a good chat with Ancelotti, that's why I knew that I will play for Real this season," Khedira told reporters on Tuesday.
Manchester United instead sealed a move for Everton midfielder Marouane Fellaini for 27.5 million pounds but reportedly failed to complete moves for Athletich Bilbao's Ander Herrera and Real Madrid's Fabio Coentrao.
Khedira also spoke of his disappointment at seeing his teammate Mesut Ozil depart Real Madrid to join Arsenal in a move that saw the North London club smash its own transfer record.
"Personally, I regret that he leaves," Khedira said. "It's a loss, because I think that Mesut can make the difference.
"I was informed two or three days ago, that's why it came as no surprise for me."