The Brazilian winger, who turned 18 earlier this year, agreed a deal to join the Blues from Palmeiras 14 months ago, with the transfer scheduled to take effect after his birthday.
Highly rated for his flair and attacking instincts, Estevao made 83 first-team appearances for Palmeiras and played a key role in their front line.
He notably featured at the Club World Cup this summer, where he scored against Chelsea in the quarter-finals - although the London side went on to lift the trophy.
His arrival at Stamford Bridge comes after a short break following the international tournament, during which he represented Brazil on five occasions in World Cup qualifying.
"I am very happy, it feels very rewarding to represent Chelsea, one of the biggest clubs in the world," Estevao said during his first day at Chelsea.
"I am very happy and I hope to help the team in the best way possible."
He made his senior debut for the Seleçao in September and has since become a regular fixture in the national side.
Chelsea have high hopes for the 18-year-old, whose performances in South America have already drawn significant attention.
The winger's pace, technique and eye for goal made him a standout in Brazil's domestic league and a crucial part of Palmeiras' recent success.