A protracted chase has paid dividends for the Stamford Bridge outfit, with Andre Villas-Boas having identified Cahill as a top target for the January transfer window.
Talks dragged on longer than both sides would have liked, but an agreement has now been reached.
Cahill successfully passed a medical on Saturday morning, before watching his new team-mates beatSunderland 1-0 in their latest Premier League fixture.
He is hoping to come into contention for their next outing, with the Blues due to travel to Norwich on Saturday.
Cahill is delighted to have seen a move pushed through and is looking forward to opening an exciting new chapter in his career.
“Chelsea is a massive club, it is a club that looks to win trophies season in season out and it is a big opportunity for me to be a part of that,” he told the club’s official website.
“Opportunities like this you can’t turn down.”