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The former Brighton Hove Albion coach will succeed Thomas Tuchel at the Stamford Bridge dugout.
Chelsea have announced Graham Potter as a new first-team head coach of the London club.
The Blues dismissed former coach Thomas Tuchel earlier on Wednesday morning after an embarrassing start to their Champions League campaign this season.
Thomas Tuchel's men slumped to their third defeat in their opening seven games after the 1-0 loss to Zagreb on Wednesday night.
The 47-year-old German was then issued his marching orders less than 24 hours later.
A club statement on Thursday read:
Potter is expected to be in the dugout for Saturday's game against Fulham this Saturday along with his Brighton staff.
Potter quickly emerged as Chelsea's No 1 target and he was locked in advanced talks with the Blues on Wednesday night, thrashing out an agreement.
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Reports had circulated in the UK media that Brighton's manager was next in line for the job as other names were also mentioned internally within the Chelsea board including former PSG and Tottenham manager Mauricio Pochettino.
However, Chelsea have finally decided to recruit the services of Graham Potter after verbally agreeing terms with the London club.
Having made a formal approach to Brighton, Chelsea was granted permission to speak to Potter soon after news broke about Tuchel's departure.
According to DailyMail, talks for Graham's appointment was led by co-owners Boehly and Behdad Eghbali in London on Wednesday afternoon and continued into the evening.
The Blues hierarchy have now decided on Potter as the man to lead Chelsea under the new ownership after his impressive spell in Brighton.
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