The former Tottenham midfielder was linked with a switch to Old Trafford during the summer, after a tough start to life in Madrid following his £30million transfer in the summer of 2012.
However the Croatian appears to have won over new manager Carlo Ancelotti, having made 10 appearances for the Spanish giants already this season.
Modric appears happy with life in Spain, and indicated he is ready to snub any further advances from United, revealing he hopes to stay in the Spanish capital for the remainder of his four-year contract and beyond.
“I have no doubt that the best thing that ever happened to me in football is to play in Madrid,” said Modric, speaking to Croatian newspaper Sportske Novosti.
“Where will I be in four years? Here.
“Besides being a great club, my family feels amazing in Madrid.
“In football it is difficult to plan, but if you ask me, I would like to retire in Madrid. With titles, of course.”
The news may come as a blow to David Moyes, who is still searching for a creative midfielder. Modric was supposedly a January target, after Athletic Bilbao revealed last week they would not be selling Ander Herrera in January.