The 19-year old midfielder - who received a call up for the 30-man preliminary Croatia squad for the World Cup - has been set to join the Premier League club since January, although, having stayed with Hajduk Split for the remainder of the 2013/14 campaign, the switch has only just been confirmed.
Upon completion of the transfer, Pasalic revealed his delight at signing the deal, and praised Chelsea legend Frank Lampard as his favourite player.
Speaking to the official club website, the German-born Croat said: "I am very happy because I am now a Chelsea player. I am very impressed by the training ground and I must thank everybody at Hajduk. This is now a new start in my career.
‘I am a central midfielder, my favourite player is Frank Lampard, and so I am very happy to be a Chelsea player."
Having made his first-team debut in early 2013, his first full season as a regular was remarkable, as the youngster scored 11 goals in 36 games to help his side to third place in the Croatian Prva HNL. He was named the Young Player of the League by Croatian media outlet HRT, as well as being awarded a place in the Prva HNL's Best XI.
The midfielder has played at every youth level for his country - starting at Under-14 - and looks set to be a star for Vetreni for many years to come.
Despite confirming that Pasalic will join up with Chelsea's pre-season training today, and that he would stay for at least a week, it is unlikely that the 19-year old will have an impact upon the first-team this season. A loan move has been rumoured, with Lazio said to be keen on taking him for the season, whilst Chelsea loan-farm Vitesse Arnhem are another likely destination.
Despite not playing this season, if Pasalic can grow into half the player that his hero Frank Lampard was at Stamford Bridge, fans will be delighted that the club have moved to secure his signature at such a young age.