Joao Felix signs for Chelsea on loan from Atletico Madrid
Felix has also signed a one-year extension to his Atletico contract until June 2027.
Boss Graham Potter said injuries had "sharpened" Chelsea's focus in their pursuit of the Portugal international, with Christian Pulisic ruled out for a couple of months.
"He's a quality player," said Potter.
"He will make a difference in the final third of the pitch, and I'm looking forward to working with him.
"He's young but still has lots of good experience, and it's given us all a bit of a lift.
"I've been aware of the potential deal for a while, but our injuries may have sharpened our focus on it.
"But it's nice to get him here, and he's been training today, which is positive for us."
Arsenal and Manchester United had been linked with the 23-year-old, whose wages Chelsea will pay in full until the end of the season as part of the loan deal.
"Chelsea is one of the great teams in the world," said Felix.
" I hope to help the team reach their objectives. I am very, very happy to be here and very excited to play at Stamford Bridge."
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