The Scottish champions were looking at a sell-on fee if Manchester United followed up their interest in the £30 million striker.
Dembele returned to Celtic this month for the title celebrations and insisted he did not know what the future would hold for him.
But the decision has been taken out of his hands by Lyon sporting director Juninho and the club's new manager Sylvinho.
Juninho said: "There will be only be three departures from the club this summer and they won't be either Moussa Dembele or Memphis Depay.
"Moussa's form has been a nice surprise for us this season. He's very good technically and we want to build on that."
"We want to keep him and we will."
The 22-year-old won all six trophies out of six during his two-year spell in Scotland with Celtic, before returning to France for a £20 million fee last summer.
He grabbed 15 Ligue 1 goals in just 21 league starts for his new club.