The 17-year-old student, who scored four goals on his debut for Finland Under-18s against Lithuania on Thursday night, will join the Londoners in November on a five-year contract.
The German-born Forssell is believed to have turned down the chance to join Ajax, Internazionale, Liverpool, Bayer Leverkusen, Bayern Munich, Sampdoria and Rangers in favour of a move to the European Cup-Winners' Cup holders.
Forssell is already known to one of his new colleagues, the Chelsea defender Franck Leboeuf. The Finn scored in a practice match in Helsinki against France before the World Cup and he received Leboeuf's shirt as a souvenir after the game.
Forssell said: "I could not believe the number of clubs who wanted me. It was very flattering. I've seen a lot of English football on television and when my parents and I visited London, Chelsea felt right for me.
"I met all the players, from the youth team to the big names, and everyone was so welcoming. It will be marvellous for me to learn from watching and working with players like Gianfranco Zola, Brian Laudrup and Tore Andre Flo.
"It's a dream chance. I'm so excited about my move to Chelsea, but I will continue to do my best for HJK Helsinki until I leave in November."
Chelsea's managing director, Colin Hutchinson, who helped persuade Forssell to join the London club, added: "We're delighted Mikael has chosen Chelsea. It is part of our policy to bring in young talent with potential."
Forssell joins in a week when Chelsea have also signed the 17-year-old Italian, Luca Percassi.
Blackburn Rovers have denied reports that Colin Hendry's desire to move to Rangers has resulted in him being stripped of the club captaincy and ordered to train alone.
"While the club is determined to remain professional and dignified in this matter, we feel compelled to point out that Colin Hendry has not been stripped of the captaincy because he is not the captain," a club statement said. "Our captain is Tim Sherwood. Colin Hendry has not been ordered to train alone. It was agreed in his best interests that he could.
"If a transfer [to Rangers] is not concluded over the weekend, it is our intention that Colin would re-join the squad to resume normal duties."
The Nottingham Forest goalkeeper, Marco Pascolo, has joined FC Zurich on loan before a possible permanent move. The 32-year-old former Swiss international, who started his career with Zurich, has made just six appearances for Forest since a pounds 750,000 switch from the Italian side Cagliari last summer. Forest have failed with a pounds 2m offer for the West Bromwich Albion winger, Kevin Kilbane.
Crystal Palace have completed the signing of the Argentinian Under-21 internationals Pablo Rodrigues and Christian Ledesma from Argentina Juniors for pounds 2m.Reuse content