Javier Pastore, speaking to Top Mercato, said there is "absolutely nothing" in reports linking Fernandez with a summer move to the Bernabéu.
The saga began during the international break when Fernandez gave a string of interviews in which he spoke warmly about Madrid and admitted uncertainty over his future. Chelsea manager Liam Rosenior responded by handing the vice-captain a two-game ban.
Fernandez missed the FA Cup win over Port Vale and will also sit out Sunday's Premier League match against Manchester City — a game that has direct implications for Chelsea's Champions League qualification push.
Pastore initially hit back at the punishment, calling it "completely unfair." He has since changed his tone significantly.
"We're on the same page with Chelsea," he said. "We made peace yesterday and the day before that, between Chelsea and the player. There were never really any problems. We cleared the air."
He was also at pains to contextualise Fernandez's original comments.
"He was simply talking about a city. Then there were a lot of interviews in a short period where he talked about his future. The media mixed things up and started saying he was going to leave Chelsea. There's absolutely nothing to it."
Pastore acknowledged the player made an error.
"We explained to the player that, even if he did nothing wrong, he should not have said that. He is only 25 years old. He is still young and still has things to learn."
Fernandez apologised privately to the club, his teammates, Rosenior and sporting director Paul Winstanley. Rosenior has confirmed his vice-captaincy remains intact.
The situation is resolved — for now. Contract talks between Fernandez and Chelsea broke down earlier this year, and Pastore has previously stated that if no agreement is reached after the World Cup, "we will explore other options."
Chelsea sit sixth in the Premier League. Champions League football next season is the immediate priority. After that, Fernandez's future is still an open question.