The 18-year-old was heavily linked with the Old Trafford outfit and was expected to be playing in the Premier League next season.
However, the Portugal international has now sealed a €35million move to the Bundesliga champions.
Bayern chairman, Karl-Heinz Rummenigge said: “Renato Sanches has been observed over a long period, in spite of well-known international competition.
“Renato is a dynamic, strong tackling and technically savvy midfielder who will further enhance our team.”
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