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The 24-year-old German striker, who was heavily linked with Liverpool, has been in scintillating form for RB Leipzig and attracted interest from the Premier League.
And Chelsea have now beaten the Reds to land Werner, who has agreed personal terms with the Blues ahead of his move to Stamford Bridge.
Chelsea confirmed that the Germany international would remain at current club RB Leipzig until the end of the Bundesliga season.
Werner will end his four-year stint with the German club in July when he becomes a Chelsea player after completing his medical.
"I am delighted to be signing for Chelsea, it is a very proud moment for me to be joining this great club," he told Chelsea's official website.
"I, of course, want to thank RB Leipzig, the club and the fans, for four fantastic years. You will forever be in my heart.
"I look forward to next season with my new teammates, my new manager and, of course, the Chelsea fans. Together, we have a very successful future ahead of us."
Chelsea have not revealed the fee for the transfer, but the Werner deal is expected to be in the region of £48m.
Werner, who moved to RB Leipzig in 2016 from VfB Stuttgart, has scored an impressive 32 times and registered 13 assists in 43 appearances across all competitions this season.
Werner has become Frank Lampard's second major summer signing after the acquisition of Hakim Ziyech from Ajax for £36m.
Speaking on the signing of Werner, Chelsea director Marina Granovskaia said: "We are very excited that Timo Werner has chosen to join Chelsea.
"He is a player who was coveted all over Europe and it is no surprise, he has that rare mix of being young and exciting and yet established and proven.
"We can't wait to have Timo on board, but until then, we wish him and RB Leipzig all the best for the rest of this season."
Featured Image Credit: PA
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