Manchester United have agreed to sell Angel Di Maria to Paris St Germain for 63million euros.
The 40-year-old Australian, who left Fulham at the end of last season after five years at Craven Cottage, has signed a one-year contract at Stamford Bridge.
He told chelseafc.com: "It's a phenomenal club. It's one of the biggest and best clubs in the world, and it's an honour to sign for Chelsea. I didn't take much convincing to come here."
Schwarzer moved to England in 1996 to join Bradford before making 367 league appearances in 11 years with Middlesbrough. He won the League Cup with Boro in 2003 and appeared in the 2006 UEFA Cup final against Sevilla.
During his time at Fulham he became the first overseas player to make over 500 Premier League appearances and reached another European cup final as the Cottagers lost out to Atletico Madrid in 2010.
Schwarzer's contract with Jose Mourinho's Blues runs until the 2014 World Cup in Brazil, where the veteran keeper will hope to add to his 108 caps given Australia's qualification for the tournament.
The signing appears to have solved Chelsea's goalkeeping dilemma.
The Europa League winners were on the lookout for a support keeper to Petr Cech following the release of Ross Turnbull and Hilario at the end of the season and Premier League rivals Norwich this week confirmed rejecting two formal offers for England stopper John Ruddy.
Schwarzer revealed returning Blues boss Mourinho had helped persuade him to join "one of the best clubs in the country" after speaking to the Portuguese about his future options.
He told Sky Sports News: "I've spoken to the manager at Chelsea and it was very easy to make the decision that Chelsea was the right club for me.
"The size and ambition of the club and the opportunities at the club ticked all the boxes. It was an amazing opportunity to join a fantastic club.
"It's one of the best clubs in the country, if not one of the best clubs in the world, so it was very easy to make the decision after speaking to the manager."