The Senegal striker was the second highest goalscorer in the Bundesliga last term and currently leads the scoring charts after four games of this season, making him an attractive target for several clubs around Europe.
German club's director of sport Dirk Dufner: "The issue has been dealt with ... negotiations with Newcastle broke down.
"He is a very special lad and we are fortunate that he is with us.
"We want to enjoy this fortune for a little while longer."