Schlotterbeck has impressed with his performances at Freiburg in the Bundesliga and Newcastle showed interest in signing him in January; Freiburg have been realistic on potentially losing him.
Newcastle have been tipped to rekindle their interest in the centre-back, while Tottenham have him on their list of defensive targets for the summer.
However, both Premier League sides will miss out on Schlotterbeck as he is Dortmund bound.
According to German daily Bild, the 22-year-old is currently at Dortmund and is undergoing a medical with the Ruhr giants.
He has put pen to paper to a three-year deal at Dortmund, with an option to extend it further.
Dortmund will pay Freiburg an initial €20m for the defender, with a further €5m to come in bonus payments.
Schlotterbeck is being well rewarded for the switch and will earn around €4.5m per year at Dortmund.
