Zamalek moved for the attacking midfielder, who emerged as the top scorer in African Nations Cup in Angola with five goals, after learning that his current deal is due to run out at the end of the season.
However, Ittihad chairman Mohamed Moselhi has insisted that Gedo is going nowhere.
"People who said that Gedo's contract will expire at the end of the season are mistaken," Moselhi told Al-Hayat TV.
"He has already penned a new deal that will tie him to the club until the end of the 2010-11 season.
"There was some delay in registering the new contract because we had problems with the Egyptian FA, but everything has been resolved."
It remains to be seen whether Zamalek will take legal action against Ittihad.
Besides emerging as the top scorer, Gedo scored the lone goal for Egypt in the final as they sealed their third title in a row and their seventh since the tournament started.