The Bundesliga club rejected an initial bid from Barcelona last week for the 20-year-old, who was one of the stars of the season for the club in 2016-17, as the Liga giants seek to fill the void created by Neymar's exit to Paris Saint-Germain.
Speculation mounted that the France forward was Camp Nou bound after he missed training without permission on Thursday.
Dortmund are holding out for a bid of around €135 million for Dembele and on Sunday they have confirmed that he wouldn't be returning to squad training in the short-term future.
"Borussia Dortmund has decided to continue the suspension of the player Ousmane Dembele from first-team training until further notice," a club statement read.
"Our complete focus lies on having a on having a good preparation for our first Bundesliga match against Wolfsburg next week," sporting director Michael Zorc said.
"Of course, Ousmane Dembele has the opportunity to exercise individually apart from the group."
Dortmund had confirmed a bid for the 20-year-old from Barca had been rejected ahead of the weekend and said he'd be suspended for their DFB-Pokal clash against Rielasingen-Arlen on Saturday.
Peter Bosz's men won that game 4-0 but will not welcome Dembele back into the fold for their Bundesliga opener against Wolfsburg next weekend.
Dembele scored 10 goals and supplied 20 assists in 49 games in his debut season with Dortmund.
Earlier this week, chief executive Hans-Joachim Watzke said a fee of €100m for the player was "in every case, not enough" and the Bundesliga club's asking price is reported to lie closer to €135m.
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Speaking about Dembele after Saturday's victory, Pierre-Emerick Aubameyang, who was also been linked with a move away from Signal Iduna Park during the off-season, expressed that his team-mate is in a tough spot.
"We will see what happens," he told Sky. "Whatever happens, happens. It's a difficult situation."