Wayne Bridge completed his £7m switch from Southampton to Chelsea on Monday, with Graeme Le Saux moving in the opposite direction.
England full-back Bridge, 22, signed a five-year deal and is the third high-profile summer arrival at Stamford Bridge as part of new owner Roman Abramovich's revolution.
Bridge joins Geremi and Glen Johnson, who have already moved to the Blues for a combined £13m.
Bridge, who is keen to secure a first-team berth in the England side, admitted that his switch to Claudio Ranieri's side fitted in with his ambitions.
"This is a big step up for me with the players Chelsea are looking to buy to build a great squad," Bridge told Chelsea's official website.
"They've got a good squad at the moment so hopefully I can add to that and I've certainly come here to win medals."
Southampton chairman Rupert Lowe earlier revealed that Bridge, who joined the club as a trainee, had completed his move to Stamford Bridge.
"We can confirm that Wayne Bridge has signed a contract with Chelsea Football Club," announced Lowe.
"Graeme Le Saux has at the same time signed a two-year contract with our club and will be travelling to Sweden to join the squad later this week."
The 34-year-old Le Saux is thought to have cost Southampton about £500,000 to move to St Mary's.
Chelsea tabled a third bid for Bridge last week and Lowe admitted he had little option but to let the left-back open talks once he handed in a transfer request.
Lowe added: "We are understandably sad to lose the services of Wayne Bridge.
"But he made it abundantly clear that he saw joining Chelsea as a career progression despite having three years remaining on his contract with Southampton Football Club.
"We continue to subscribe to the view that sporting success is achieved by people who want to play together, share a common goal and are committed to the club and their team-mates.
"Graeme Le Saux will bring great ability and experience to our squad and we all look forward to working with him to take the club forward."
Bridge has won 11 England caps under England boss Sven-Goran Eriksson and has made 173 appearances for the Saints.