Few expect Schalke 04 to win the European Cup, but as Meister der Schmerzen, champions of pain, they remain in a league of their own. Only the Bundesliga's most proudly melodramatic club could usher in the biggest game of an unexpectedly successful campaign, Tuesday's Champions League semi-final against Manchester United, with a sea of tears.

"We want to have as much normalcy as possible," their manager, Ralf Rangnick, says on Friday. The 52-year-old, in his second spell with the Royal Blues, understands that these things are relative in Gelsenkirchen. In the club's 107-year history, triumphs and traumatic defeats have been celebrated with equal vigour and defiance, to the point where the original distinction has become slightly blurred. This season is another prime example. Tenth in the league, in the final of the German Cup and the semi-final of the Champions League, Schalke have both dashed and exceeded expectations.

Just when their supporters thought things could not be more bittersweet, their totemic goalkeeper Manuel Neuer, who has been at the club from the age of four, handed in his notice via his Facebook page. "I've told [the club] that I won't be renewing my contract," he wrote on Wednesday morning. "I know that many of you will find that incomprehensible, but after 20 years of loyalty I wanted to give myself an opportunity for change."

Within hours, 15,000 users had left mostly angry comments. "I understand the anger and the disappointment, I would have reacted in the same way," the 25-year-old wrote later that night, after sobbing heavily at a press conference.

Neuer, whose contract expires in 2012, will move to Bayern Munich in the summer if the clubs can agree a price. A sum of €20m (£17.6m) has been mooted, probably too much for the heavily indebted Schalke (around €200m) to turn down.

As early as last September, Neuer was hinting at his departure, but the timing of his declaration was curious. "I wanted to be honest with the fans," he says. Maybe he was afraid to get caught up in the emotion after another giant-killing in Europe. In the quarter-final Schalke beat the holders, Internazionale, 7-3 on aggregate and Gelsenkirchen, a post-industrial, one-club-town that is twinned with Newcastle, went bananas.

The German media (it was Der Spiegel who came up with the "champions of pain" line) have naturally compared Rangnick's side with Schalke's unlikely Uefa Cup winners from 1997, the so-called "Eurofighters". But this year's foray into the big time is perhaps even more incongruous considering their desperately poor start to the season.

After finishing as Bundesliga runners-up in 2010, the then manager, Felix Magath, promised to end the 53-year wait for the championship and embarked on a dramatic reshuffling of the squad. The centre-back Benedikt Höwedes, a rising star on course for a Germany call-up, was the only survivor of a very solid back-four. Up front, Magath went for star-names: Raúl (Real Madrid) and Klaas-Jan Huntelaar (Milan) were lured with attractive wage packages.

But if the plan was to transform Schalke from a very defensive "1-0" kind of side into an attack-minded super-power, it failed. Constantly changing elevens seemingly devoid of structure lost the four opening games. The poor results coincided with the breakdown of relations between the enigmatic Magath and the supporters. The 57-year-old, who had been entrusted with almost absolute, English-style powers, first fired a popular fan representative, then patronised those who opposed the move as "a small group". Magath and his staff were behaving "like an occupational force", a club insider told Süddeutsche Zeitung.

A decent run of matches before Christmas eased the pressure on the coach but another bout of turbo-charged wheeling and dealing in January took Magath's total to roughly 40 ins and 30 outs (estimates vary) in 18 months and upset the chairman, Clemens Tönnies. Despite taking the team to the Cup final in Berlin and knocking out Valencia in the last 16, Magath was fired last month without compensation. Neuer and a number of senior players had asked the board for the authoritarian's dismissal. Tönnies also cited "transfer irregularities".

Rangnick, who had recently resigned from his post at Hoffenheim, was asked to bring back a semblance of order and heal the rifts in the dressing room. The Swabian never played at the highest level; only as an amateur for Stuttgart, Victoria Backnang and tiny Southwick while studying in England. Largely self-taught, his epiphany had come in a friendly between Backnang and Valeriy Lobanovsky's Dynamo Kiev in 1984.

"I was convinced they had one more player on the pitch," he later said about the opponents' pressing game. "This was a whole new way of football." A few years on, he had Italian friends sending over tapes of Arrgio Sacchi's Milan and he once spent an entire family holiday looking at the training regime of legendary Czech coach Zdenek Zeman, then manager at Foggia.

Rangnick adopted the revolutionary methods of these mavericks and took little SSV Ulm 1846 into the Bundesliga in 1999. But the country was not yet ready for his academic approach. Suffering mixed fortunes at Stuttgart, Hannover and Schalke he struggled for credibility before a software billionaire called Dietmar Hopp gave him a chance to redeem himself at Hoffenheim five years ago.

After five unbeaten games at Schalke he has lifted the mood considerably. The wins against a badly coached Inter showed a good eye for tactics: Schalke adopted an offensive 4-4-2 system to exploit the space behind the Italians' front three.

Rangnick is still getting to grips with a ballooned, randomly assembled squad but his careful man-management has certainly brought the best out of key players, such as the irrepressible Raúl, the powerful wide attacker Jefferson Farfán and playmaker José Manuel Jurado.

The German attacking midfielder Alexander Baumjohann, banished to the reserves by Magath, has returned and hints again at the talent that once marked him out as the next big thing. The 17-year-old Julian Draxler has continued to make good progress, too, even if an over-officious teacher has – no joke – asked the authorities to check that Schalke are not in violation of employment law: Article 14 of the Youth Worker Protection Law states that minors are not allowed to work after 8pm.

Rangnick is sweating rather more about the availability of the outstanding Höwedes, who is fighting to overcome a stomach muscle problem. The versatile Joel Matip, 19, could slot in next to former Germany defender Christoph Metzelder. In the absence of Huntelaar (knee), Brazilian journey-man Edu, formerly of VfL Bochum and the Suwon Bluewings, will lead the line.

Out of respect to Neuer, the popular stadium-punk-rock classic "Ich würde nie zum FC Bayern München gehen" (I would never go to Bayern Munich) by Die Toten Hosen will not be played on Tuesday. "Manu is an important member of our team, I hope there'll be unity between fans and players", said Rangnick.

All told, Rangnick's line-up do not quite shout "Champions League final" at you. But then Gelsenkirchen is a place where strange things happen. In 2001, Schalke fans were celebrating an improbable last-day-of-the-season championship on the pitch while second-placed Bayern Munich were still in action. An equaliser deep in stoppage time by Ottmar Hitzfeld's Bavarians broke Royal Blue hearts. Ask any of their 90,000 members and they will tell you they are overdue some divine retribution.