Chelsea have signed PSV Eindhoven's Arjen Robben in a £12m deal which will see the Dutchman move to London at the end of the season.
Sources in Holland told the BBC the winger agreed a five-year deal after talks with coach Claudio Ranieri and chief executive Peter Kenyon.
The 20-year-old had held extensive talks with Manchester United, and was even given a tour of Old Trafford.
But PSV rejected the United bid - reported to be as low as £5m.
Robben said: "I think I can become a better player at Chelsea and develop myself into a top European player."
Kenyon - who helped beat off his former club United to land the deal - said: "Arjen is a top quality player who will become a major asset for our club in the years ahead.
"It's an excellent example of how Chelsea is appealing to the new wave of European talent and our commitment to bring the best young players to Stamford Bridge as well as to cultivate the best, young English talent.
"This is a great signing for Chelsea. For his age, he shows great maturity and mental strength to go with his natural footballing skills."
Chelsea coach Ranieri believes there is nothing his latest capture cannot do.
'Quick and strong'
"Arjen will be a fantastic addition to our squad. He is quick, strong, scores goals and makes goals. He can do everything," Ranieri said.
"His style is perfect for the Premier League and I am very happy that he wanted to come to us."
The winger, who has scored two goals in four games for Holland, had been seen by United as a long-term replacement for Ryan Giggs.
But it is claimed in Holland that PSV were furious when United came back with a £5m offer for Robben despite his £10m price tag.
PSV chairman Harry van Raaij said: "The negotiations started three or four weeks ago, just after the deal with Manchester United fell through.
"United were first in the queue so we kept Chelsea waiting, but when we had our second discussion with United over a fee, we were very disappointed over how low they believed they could push us.
"They seemed to think he was worth a lot less than Chelsea were willing to
"That was a massive letdown and it was only then we opened negotiations with Chelsea. We tried to keep these things secret as long as we could and I think we succeeded."
Robben, who has pushed himself into Dick Advocaat's thoughts for a place in Holland's Euro 2004 squad, is currently suffering with a hamstring injury, but the problem is not serious.