The midfielder himself had previously signed a pre-contract agreement to join Spurs on a free transfer in July, but the Premier League giants were adamant to finalise the move as soon as possible, and eventually broke the bank to sign the much-coveted Schalke play maker.
Goal.com reports that the two sides could also play out a friendly encounter in the summer as a part of the deal.
While the move is intelligible when looked for Tottenham's prospective, it makes little sense for the Royal Blues to part with perhaps their best player for such a low transfer fee.
With Klaas-Jan Huntelaar failing to reproduce his spectacular form that saw him become the league's top goal scorer last year, Schalke have been heavily relying on Lewis Holtby and Jefferson Farfan to create and finish goal-scoring chances.
Nevertheless, Holtby has been up to the task.
Schalke's standout performer this season has notched up 10 assists and four goals in 24 appearances. Furthermore, the 22-year-old averaged an astounding 1.7 key passes per match, while completing 81 percent of his passes.
One need only look at Schalke's last home match to realise the importance of Holtby in Gelsenkirchen—the midfielder put in his best performance of the season, assisting two goals as well as scoring one himself, as the Gelsenkirchen outfit secured a hard-fought win.
Holtby's brilliant performance against Hannover looked to have persuaded the club's boardroom not to sell him, but as talks over signing Lyon midfielder Michel Bastos progressed, the Royal Blues opted to cash in on their star midfielder.
However, time will prove this to be a dreadful decision.
The inconsistency that has plagued the club in Bundesliga will now become even more apparent without Holtby, the player who more often than not made all the difference on the pitch, and the Champions League round of 16 tie against Galatasaray will be a tremendous task for Schalke, as they exit the January transfer window severely weakened.
On the other hand, Turkish representatives have put in a strong statement of intent by adding experienced veterans, Wesley Sneijder and Didier Drogba, to their squad in an attempt to progress to the quarter finals of the Champions League.
Finding a replacement for Holtby as soon as possible will not be easy, but it is a task that needs to be done in order for the club to ensure Champions League football next year. Failure to do so will leave Schalke in a huge turmoil.