German league leaders Bayern Munich on Tuesday confirmed they are negotiating with Borussia Dortmund's Germany defender and club captain Mats Hummels.

Should he sign for Bayern for next season, Hummels would be the third big-name Dortmund star to quit Borussia for Munich in the last three years after midfielder Mario Goetze in 2013 and striker Robert Lewandowski in 2014.

Dortmund's CEO Hans-Joachim Watzke has already said he expects Hummels to join Bayern for next season, even though his Borussia contract runs until June 2017.

"Basically, I can confirm what Mr Watzke has said; Mats is dealing with Bayern," chairman Karl-Heinz Rummenigge said as the Munich club jetted off for Wednesday's Champions League semi-final first leg at Atletico Madrid.

"But every transfer is a three-way business, so we have to wait calmly.

"You have to respect his current contract in view of our proper relationship with Borussia Dortmund, we have to be considerate."

Dortmund, who will likely finish second behind Bayern in the Bundesliga, will be back in the Champions League next season, but Hummels, along with midfielders Ilkay Gundogan and Henrikh Mkhitaryan, is one of three stars out of contract next season.

Borussia want to extend all three contracts, but Gundogan is almost certain to join Manchester City to work with current Bayern coach Pep Guardiola next season.

Gundogan's agent met City's director of sport Txiki Begiristain in Amsterdam last month, while reports in the UK media claim a five-year contract has already been signed.

Mkhitaryan has been linked to Chelsea, although he is the one most likely to stay.

Hummels joined Dortmund from Bayern in 2008 and Watzke is realistic about whether he will stay.

"I believe that if he (Hummels) goes, it will be in the direction of Munich," said Watzke.

"He still has unfinished business with the club (Bayern Munich). His father, his mother and his brother all live in Munich.

"His girlfriend comes from Munich, he's from Munich too -- so a whole lot of components have already come together."

Watzke says he can understand Hummels' deliberations.

"We have to accept when someone like Mats, who has already played for Borussia Dortmund for eight years, is 27 and would come to think: 'Am I going to play for Borussia Dortmund for my entire career, or will I do something else?'" said Watzke.

However, the Borussia boss told Munich-based newspaper Sueddeutsche Zeitung he would "fight for Mat, like I have never before fought for a player".

Watzke said Bayern would have to "dig really deep in their pockets" to sign Hummels, who has a market value of 32 million euros ($36.1 million).

One Bayern star Watzke would like to see playing in the Black and Yellow shirt again is Germany's World Cup winner Goetze, who left in 2013 for 37 million euros, but has failed to make an impact in Munich.

"He came up through the youth teams with us and he is highly regarded -- also by me personally," said Watzke.

"If he came on the market and we received a signal that he was interested to come back to us, we'd discuss it."