The France international has snubbed interest from the Premier League to join the Bavarian giants
The European champions will pay a €42.5 million (£37m/$51m) release clause to land the France international, who will sign a five-year deal.
The likes of Chelsea and Liverpool were heavily linked with a move for Upamecano, but the 22-year-old has decided to stay in the Bundesliga.
Bayern had ‘strong competition’ for Upamecano
When asked whether he could confirm reports that Bayern had won the race for Upamecano, Salihamidzic told Bild: “I can do that, and we are very happy about it at FC Bayern.
“We had very good, intensive and professional discussions with Dayot and his advisor Volker Struth for many months. We knew that we had very strong competition.
“Upamecano is a young player, 22, whose qualities have already developed extraordinarily. I was always convinced that we had presented a good concept.
“We presented him with our vision of his career at Bayern. During the past week in Doha I had further talks with everyone involved. At the end of a long process, the players, family and management were convinced that FC Bayern was the right club.
“Dayot Upamecano will play for Bayern for the next five years. “Upamecano is tied to Leipzig until 2023 but his agent confirmed last month he had a release clause in his deal, meaning he was always likely to move on this summer.
Bayern made no secret of their desire to get their hands on the highly rated defender and Struth was spotted entering the club’s offices for talks at the end of January. The European champions are set to lose David Alaba on a free transfer in the summer and were keen to secure a replacement quickly.