Walker has won five Premier League titles, two FA Cups and one Champions League crown with City.
"It (move to Bayern) was close but in football things can happen. It wasn't meant to be," Walker told British media.
"Would I have enjoyed the experience? Of course, I would, but this (City) is a great club, and you can't underestimate what this club has done in the last six or seven years.
"Why should I walk away if I am going to get enough game time that's right for me? That is all I want. It was about who gave me the most years."
"It wasn't like I was going to a worse club because Bayern Munich is a massive club, and seeing what Harry is doing there and will do, it wasn't a step down," Walker added.
"In the back of my head I always wanted to play for Manchester City but I had to do what was right for me and my future. It was just about which club gave me the years in my contract to play football at the highest level."