Bremen sports director Klaus Allofs quashed speculation linking Diego to Real Madrid as he confirmed that the 22-year-old midfielder added another year to his current deal at the Weserstadion.

"The contract extension shows just what Werder Bremen and Diego think of the rumors of a transfer that raise their ugly heads again and again," Allofs told the Club's official site.

"The new deal is proof of how we wish to work with him over a long time period. We are in a good position to do that now,"

The former Porto ace, who arrived from the Portuguese outfit two year ago, was thrilled to extend his stay with Werder.

"I’m delighted to have extended my contract. I felt quite at home in Bremen very quickly – in every possible way. The best thing is that the positive feeling is constantly increasing. I have the opportunity to play football successfully here," he said.