Earlier this year, Goretzka revealed that he had turned down a new contract at Schalke 04 and alleged interest from the Premier League to sign for Bayern at the end of his existing deal at the Veltins-Arena.
Goretzka has competed in European competition with Schalke, but the Germany international has admitted that he wanted to play for a team who were contenders to emerge victorious in the Champions League.
The 23-year-old told Funke Sport: "I've come to the conclusion that this is right step now. The Champions League also plays a big role in my decision. Bayern start with different expectations in the Champions League, with Schalke we are always focusing on surviving the group stages.
"It was a long decision-making process, I spent a lot of time on it, and I was well prepared for the situation."
Bayern have not won the Champions League since 2013.