Let 𝔤 be a finite–dimensional complex simple Lie algebra. Given a non–negative integer ℓ, we define $\mathcal {P}^{+}_{\ell }$ to be the set of dominant weights λ of 𝔤 such that ℓΛ0+λ is a dominant weight for the corresponding untwisted affine Kac–Moody algebra $\widehat {{\mathfrak {g}}}$ . For the current algebra 𝔤[t] associated to 𝔤, we show that the fusion product of an irreducible 𝔤–module V(λ) such that $\lambda \in \mathcal {P}^{+}_{\ell }$ and a finite number of special family of 𝔤–stable Demazure modules of level ℓ (considered in Fourier and Littelmann, Nagoya Math. J. 182, 171–198 (2006), Adv. Math. 211(2), 566–593 2007) again turns out to be a Demazure module. This fact is closely related with several important conjectures. We use this result to construct the 𝔤[t]–module structure of the irreducible ${\widehat {\mathfrak {g}}}$ –module V(ℓ Λ0 + λ) as a semi–infinite fusion product of finite dimensional 𝔤[t]–modules as conjectured in Fourier and Littelmann, Adv. Math. 211(2), 566–593 (2007). As a second application we give further evidence to the conjecture on the generalization of Schur positivity (see Chari, Fourier and Sagaki 2013).