The 23-year-old will bolster the attacking options for manager Graham Potter, whose squad is currently hard-hit by injuries and languishing in 10th spot in the table.
Chelsea tweeted “the artist has arrived”, welcoming the Portugal international, who had also been linked with Arsenal and Manchester United.
“Chelsea is one of the great teams in the world and I hope to help the team reach their objectives, so I am very, very happy to be here and very excited to play at Stamford Bridge,” Felix said in a club statement.
Felix joined Atletico from Benfica in 2019 for 126 million euros ($135 million), making him one of the biggest transfers of all time, and has scored 34 goals in 131 appearances for the club.
He also featured in Portugal’s run to the World Cup quarter-finals in Qatar last month, scoring in the 3-2 victory against Ghana in the group stage.
Atletico confirmed on Wednesday that Felix had extended his contract with them for one more season, until June 2027.
“From Atletico Madrid we wish Joao Felix every success in this new professional stage,” the Spanish club said in a statement.
Chelsea are 10 points adrift of a top-four spot in the Premier League season after a turbulent season and are also out of both domestic cup competitions.
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