The 22-year-old playmaker, who has a German mother and an English father, joined German side Schalke from second-tier side Alemannia Aachen in 2009.
“I thought long about the decision I’ve made,” Holtby said. “I want to take my chance to fulfil my dream. I have dreamed about the Premier League since I was a boy.
“I have asked myself many questions. What happens next year? Is it too early? Schalke’s offer was good, but did not work out.
“Tottenham are a top club and I’m fulfilling my dream. Negotiations with Schalke were initially advanced, but then I looked over it all carefully again. I have spoken to André Villas-Boas and I am confident in his plans.”
Holtby has made 75 appearances for Schalke, scoring 11 times, and has earned three caps for the senior German national side.
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