Steven Gerrard has revealed he told Luis Suarez to stay at Liverpool last season as he was too good for Arsenal.
Chelsea boss Jose Mourinho says Romelu Lukaku's attitude was the reason he let the striker move to Everton.
The Serie A side announced the move on their official website on Wednesday night, with Rovers doing likewise once the deal was ratified.
The Argentinian midfielder, who is under contract at Ewood Park until summer 2014, will remain with Palermo until June 30.
Formica, 24, joined Blackburn from Newell's Old Boys two years ago and has scored five times in 54 appearances.