Schalke 04 have signed Serbian defender Matija Nastasic on a long-term contract until 2019, making permanent his loan move from Manchester City, the Bundesliga club said on Wednesday.

"I am proud and happy to remain a Schalke player," the 21-year-old said in a club statement.

The deal comes a day after Schalke beat Real Madrid 4-3 in the Spanish capital but missed out on a Champions League last eight spot after their 2-0 loss in the first leg.

The tall defender joined City as a teenager in 2012 on a five-year deal but was unable to force his way into Manuel Pellegrini's side.

Nastasic made one appearance for City this season, in the 3-0 Community Shield defeat by Arsenal in August. He joined Schalke in January.

© Reuters