Wagner has signed a one-year contract extension with Hoffenheim that will keep him at the Bundesliga team until 2020, the club announced on Sunday.
The tall striker, who at 29 won his first international caps as part of the Confederations Cup-winning team earlier this month, scored 11 times and set up four goals in his 31 league matches last season.
Hoffenheim finished fourth — their best ever showing — and will play in the Champions League qualifying rounds.
“Sandro is a great finisher and added new components to our game last season,” said Hoffenheim coach Julian Nagelsmann.
“He keeps opponents busy, he pushes teammates and is also an important personality in the changing room.”
Wagner came through the Bayern Munich youth ranks but failed to earn a regular spot in the senior team and after spells, at half a dozen clubs he signed for Hoffenheim in 2016.
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