The Bundesliga giants were closely linked with the 24-year-old midfielder and have snapped up some of Dortmund’s key players over the past few seasons including Robert Lewandowski and Marco Reus.
Bayern are reported to be put off by his asking price and according to SportBild, the club are also concerned about the German internationals injury record.
The Dortmund star will not extend his contract with the club, which expires in the July 2016.
“Our talks came to the conclusion that he won’t extend his contract and will leave in the summer,” Zorc was quoted as saying by Sky Sports.
The 24-year-old has four assists and three goals in 30 appearances for Dortmund this season.
Dortmund sit in 7th place in the Bundesliga with 43 points in 32 games. Jurgen Klopp’s side are 15 points off a UEFA Champions League spot