"Chelsea is a massive club, it is a club that looks to win trophies season in season out and it is a big opportunity for me to be a part of that," he told Chelsea's website after signing for a fee which British media reports said was about seven million pounds.
"Opportunities like this you can't turn down."
The 26-year-old, who has seven caps, will again link up at Chelsea with England skipper John Terry and looks set to replace Alex.
Media reports say the Brazilian defender, who asked for a transfer due to a lack of first team opportunities, could join fellow West London side Queens Park Rangers.
Cahill joined Bolton from Aston Villa in 2008 with his career apparently going backwards but he has developed into an outstanding defender even though Owen Coyle's side have struggled all season.
Chelsea have swooped with Cahill out of contract at Bolton at the end of the season but talks over the move took longer than anticipated. Tottenham Hotspur had also previously shown interest in the defender.
He will now compete with Brazilian David Luiz to be Terry's central defensive partner with Cahill fighting for a place in England's Euro 2012 squad.
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