Bayern announced on Tuesday that it has agreed to extend the 36-year-old Butt’s contract until the end of next season.
Chairman Karl-Heinz Rummenigge says incoming coach Jupp Heynckes wanted Butt to stay.
Butt has returned to the starting lineup following the departure of coach Louis van Gaal. The Dutchman had benched Butt, who was a reserve keeper for Germany at last year’s World Cup, in favour of the 22-year-old Kraft.
Bayern says Kraft told the club he wants to leave when his contract expires at the end of the season.
Sports director Christian Nerlinger says Kraft wanted to be No. 1 and “we cannot guarantee him that.”