The Royal Blues had worked hard to find a solution to keep Ndiaye beyond his loan spell, with negotiations with parent club RSC Anderlecht proving difficult before the Belgian side unexpectedly offered a fresh loan with an option to buy. The 24-year-old had also made clear his own desire to stay in Gelsenkirchen.
However, the club have now decided against pursuing a permanent deal for the Senegalese midfielder, with the driving factor being the imminent arrival of Gosens, 32, from Fiorentina to his boyhood club.
According to the WAZ, the 24-cap Germany international is set to undergo his medical on Thursday before joining the squad for a pre-season training camp in Austria this weekend.
The left-back arrives on an initial loan with an obligation to buy, which is understood to apply only if Schalke retain their Bundesliga status and Gosens features in a set number of matches. The eventual fee is reported to be just over €1m, considerably lower than initially speculated, with no separate loan fee included in the deal.
Talks between the two parties are understood to have been ongoing for around two months, with head coach Miron Muslic playing a key role in persuading the left-footer to make the move.
Gosens, who grew up close to Gelsenkirchen and has long spoken of his affection for the club, is set to become one of Schalke's highest earners as he prepares for a return to the Bundesliga, having previously come close to joining the Royal Blues back in 2019 before Atalanta blocked the move.
The 32-year-old had fallen out of favour at Fiorentina despite having two years left on his contract, and was omitted from the Italian club's squad list for pre-season preparations. He will forfeit a significant portion of his salary to complete the move, with his reported net earnings in Florence understood to be well in excess of €1m per year.
Ndiaye, for his part, remains highly regarded by Schalke's coaching staff, and a return to Gelsenkirchen at a later date cannot be entirely ruled out should circumstances change.