Werner has failed to excel since arriving from Leipzig last January.
The loan deal was initially until the end of last season - and then extended to cover this campaign too.
Werner scored twice in 14 games in the second half of 2023-24, but has netted only once in 19 appearances this season, with his struggles evidenced in the price built into his temporary deal.
Under the first arrangement, Spurs had the option to sign him for £15m - but it is now an £8.5m option to buy.
Werner has 24 goals from his 57 Germany caps, but last played for his country in a friendly defeat by Belgium in March 2023.
He also scored 23 goals in 89 appearances during a two-year spell at Chelsea, winning the 2021 Champions League, Uefa Super Cup and Fifa Club World Cup, before rejoining Leipzig in 2022.