Bayern Munich have confirmed that 19-year-old Jann-Fiete Arp has signed for the club from HSV. He will decide to join either at the end of this season or delay until the 2020/21 campaign.
The German sides reached an agreement for the Under-19 international, but will let the player decide when he makes the move.
Arp can either team up with the Bundesliga side after the current season ends or spend another year with Hamburg and become a Bayern player in 2020.
The forward is expected to sign a four-year contract with Bayern, while Bild reports Hamburg will pocket around €2.5 million from the deal.
"The negotiations with Bayern Munich were constructive and fair," said Hamburg sporting director Ralf Becker. "The relegation has hit Fiete very hard. He wanted to stay here and help us get back up. He puts everything into this goal, and nothing will change in the future."
Bayern have long been credited with an interest in Arp, who also attracted attention from Chelsea . He enjoyed his Hamburg breakthrough last year, scoring twice in his 18 Bundesliga appearances.
Amid the growing interest in him and Hamburg's relegation from the top-flight, the club convinced him to sign a contract extension that runs until 2020.
"Leaving this club was never an option for me," Arp said last July in response to the rumours. "Especially in such a hard time - I cannot and did not want to leave HSV, but give the club back what it deserves. That's why it was clear to me early on that this path here at HSV has not ended for me yet."
He has featured just 14 times in all competitions for the Volksparkstadion outfit this season, with his only goal coming in the first round of the DFB-Pokal.
Although his favoured position is at centre-forward, Arp has featured on both wings and as an attacking midfielder for Hamburg.