He almost joined Everton before the transfer deadline for around pounds 2.6m. However, they pulled out of the deal and this was thought to have led to Joe Royle's resignation as manager. As Chelsea are prepared to wait until November, they can secure his services free of charge when his contract expires on 31 October.
Flo is Chelsea's third spring signing following another free capture, the Uruguayan Gustavo Poyet from Spain's Real Zaragoza and the pounds 2.25m deal for Anderlecht's Nigerian full-back, Celestine Babayaro.
On Thursday, Chelsea's managing director, Colin Hutchinson, flew to Oslo, met with Flo and his lawyer, and agreed a five-year contract. His contract in Norway do not expire until October because of the summer season there, so Flo will not join Chelsea until 1 November.
"I am a big fan of English football and it has always been my ambition to play in the Premiership," he said. "I have had offers from England, Germany and Italy, but once I knew Chelsea wanted me, my decision was made very easy."
Flo's signing means Chelsea could put out an all-foreign side out with a choice of goalkeepers although they may have to move for a new centre- back if Erland Johnsen, as expected, goes home.
CHELSEA'S FOREIGN LEGION XI: Grodas (Norway) or Kharine (Russia); Petrescu (Romania), Babayaro (Nigeria), Gullit (Netherlands), Johnsen (Norway), Leboeuf (France), Poyet (Uruguay), Di Matteo (Italy), Vialli (Italy), Zola (Italy), Flo (Norway).