England winger Sancho has been heavily linked with Manchester United after a standout 2018/2019 in the Bundesliga, in which he registered 12 goals and 14 assists in 34 appearances.
Dortmund has always maintained it does not intend to sell the 19-year-old, and Watzke has made it clear Sancho is not on the market.
"It can be assumed that Jadon will not play more than 10 years at BVB," he said. "But we have clear agreements about the present. Jadon is not on the market and he plays next season at Borussia Dortmund, guaranteed."
Dortmund, which missed out on the league title to Bayern Munich by two points, has wasted little time in strengthening its squad.
Deals for Julian Brandt, Thorgan Hazard and Nico Schulz have all been confirmed in the past week, with the majority of the outlay funded by Christian Pulisic's move to Chelsea.
"If you look at the transfer fees, you see that we were not wasteful: we got around 64million euros for Christian Pulisic and invested about 10million euros net in the three new signings," Watzke said.
"We turned one into three. My big compliment goes to our sporting director Michael Zorc."
Next up among Dortmund's priorities is to extend the contracts of head coach Lucien Favre and midfielder Mario Gotze, with Watzke saying: "I feel they both feel very well. We will deal with these two topics in the next few weeks. We want to extend with both.
"With the runner-up spot, he [Favre] achieved more than we expected. He has finally given the team a clear style of play again. Lucien is the right person for Dortmund. In the second and third year, it will become clear whether we can collect titles together."
Champion Bayern has also made significant moves in the market, spending a reported €118 million ($191.3 million) on deals for Lucas Hernandez, Benjamin Pavard and 19-year-old Jann-Fiete Arp.
It is also interested in Manchester City's Leroy Sane, something Watzke says he would be happy to see.
"I think it would be very good if Bayern bring Leroy Sane back as a German national player, because that would increase the appeal of the league. I would be the first to congratulate them," he added.