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The 32-year-old Cameroon striker arrives from Russian side Anzhi Makhachkala on a free transfer, in a move that may signal the end of Chelsea's pursuit of Manchester United striker Wayne Rooney.
Chelsea have had two bids for Rooney rejected and manager Jose Mourinho recently admitted that he had a "Plan B" in case their pursuit of the England international did not come off.
"I am very happy to be here, but also anxious because I want to get playing as soon as possible," said Eto'o, who was pictured brandishing a Chelsea shirt on the club website.
"It wasn't a hard decision. I saw the qualities Chelsea have, and I was very happy with Jose Mourinho before, so when the opportunity came, I was very happy to take it."
Eto'o previously worked under Mourinho at Inter Milan and was a member of the team that claimed an unprecedented treble of Serie A, Coppa Italia and Champions League titles in 2010.
The move also reunites him with former Anzhi team-mate Willian, who completed a switch to Chelsea in a deal reportedly worth 30 million ($47 million, 35 million euros) on Wednesday.
Willian and Eto'o are among a number of players to have been moved on by Anzhi after the Russian side's billionaire owner Suleiman Kerimov decided to restructure the club and drastically shrink their budget.
Eto'o is expected to compete with Fernando Torres, Romelu Lukaku and Demba Ba for a place at the tip of the Chelsea attack, although he played on the right flank under Mourinho at Inter.
A four-time African Footballer of the Year, Eto'o began his career in European football at Real Madrid, but joined Real Mallorca in 2000 after a successful loan spell.
He lifted the Copa del Rey with Mallorca in 2003 before joining Barcelona a year later.
The striker enjoyed stunning success at Barcelona, scoring in Champions League final triumphs in 2006 and 2009 and also claiming three Spanish league titles.
He subsequently joined Inter in 2009, as part of the deal that took Zlatan Ibrahimovic to Barcelona, and won his third Champions League title in his first season at San Siro.
It made him the first player to win consecutive European trebles with two different clubs.
His move to big-spending Anzhi in August 2011 came as something of a shock, although Kerimov was reported to have made him the best-paid player in world football.
Eto'o has also won the Africa Cup of Nations on two occasions with Cameroon and was a member of the team that triumphed at the 2000 Olympics in Sydney.
