Both Chelsea and Liverpool were keen on signing the Frenchman. However, it has now been confirmed that the 22-year-old will move to Allianz Arena at the end of the 2020-21 season.
In the late hours of Friday evening, Bayern Munich sporting director Hasan Salihamidzic revealed to BILD that Upamecano had agreed to join the reigning European champions ahead of Chelsea and Liverpool.
"I can do that, and we are very happy about it at FC Bayern."
"We had very good, intensive and professional discussions with Dayot and his advisor Volker Struth for many months. We knew that we had very strong competition."
"Upamecano is a young player, 22, whose qualities have already developed extraordinarily. I was always convinced that we had presented a good concept."
"We presented him with our vision of his career at Bayern. During the past week in Doha I had further talks with everyone involved. At the end of a long process, the players, family and management were convinced that FC Bayern was the right club."
"Dayot Upamecano will play for Bayern for the next five years."
The news comes as a huge blow to both Chelsea and Liverpool, who were also keeping tabs on the towering central defender to ease their defensive frailties.
Back in January, Bayern Munich CEO Karl-Heinz Rummenigge revealed to Sky Sports that the Bavarians were facing strong competition from Chelsea and Liverpool for the RB Leipzig superstar.
Chelsea, in particular, made the former RB Salzburg man their primary target as newly appointed head coach Thomas Tuchel is a long-time admirer of the Frenchman.
Chelsea and Liverpool to look elsewhere as Bayern Munich agree deal in principle for Upamecano
Dayot Upamecano will now put pen to paper on a lucrative five-year contract with Bayern Munich after agreeing to join the Bundesliga powerhouse. The deal will be completed in the summer after the Bavarian giants officially trigger his €42.5m release clause.
With David Alaba and Jerome Boateng set to leave the club in the summer, snapping up Dayot Upamecano represents excellent piece of business for the reigning Bundesliga champions.
Since completing a €2.2m moving to Leipzig from Austrian club RB Salzburg in 2017, the 22-year-old has gone on to stamp his name as one of the best defenders in the Bundesliga.
Leipzig, meanwhile, are reportedly set to snap up Mohamed Simakan as Upamecano's replacement, with Strasbourg president Marc Keller confirming earlier this week that the Bundesliga side could sign their prized asset this summer.
Chelsea and Liverpool will now need to look elsewhere in search of defensive reinforcements as they aim to bolster their squad ahead of the 2021-22 campaign.