Dutch side NEC Nijmegen were among the clubs hoping to sign Sahar on loan.
But a spell with the FA Cup winners will enable Chelsea to keep a closer eye on his progress and Sahar will challenge Jermain Defoe, David Nugent and Kanu for a place in Pompey boss Harry Redknapp's attack.
Sahar added: "I'm ready for the challenge of being part of such a big club like Portsmouth. I want to be part of it and to show that I deserve to be here.
"I've heard a lot of good things about Harry Redknapp, the club and the staff and they obviously had a very good season."
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