United States international Julian Green said he has never doubted he would have a future with Hamburg's first team after productive talks this week.
Bayern Munich forward Green, 19, is on a season-long loan at Hamburg but has struggled to make an impact with the Bundesliga strugglers and had found himself demoted to the club's reserve team, which plays in the fourth tier.
Bayern CEO Karl-Heinz Rummenigge described that decision as "regrettable," and there had then been speculation in the media in Hamburg that his loan deal could be cut short after he refused to appear for the reserves at the weekend.
However, Green held talks with coach Joe Zinnbauer and the club's sporting director Peter Knabel on Wednesday and it appears he will continue at HSV.
"[The talks] went into the right direction," Green told Bild. "I never doubted my future with HSV's first team. A final decision, however, will be made in the next couple of days."
Kicker has reported that the youngster will stay at Hamburg until the season, with a decision about where that will be made after talks between the sporting director and agent Roman Grill.
According to Bild, Green put in his best training session in weeks on Wednesday, and also later was on target in a 13-2 victory for Hamburg's reserves in a friendly against local side Halstenbek-Rellingen. The USMNT international played in the first half alongside several other first-team players.
Green, who joined Hamburg on the final day of the 2014 summer transfer window, made one start for the club before seeing coach Mirko Slomka sacked in September.
Since then, he has made only four appearances, all as a substitute, under Zinnbauer, although his availability had been restricted by a rib injury.