The veteran Australian goalkeeper will suit up for the Blues after being released by Southwest London rivals Fulham this summer.
40-year old Schwarzer, who spent five years at Craven Cottage, was delighted to be making the move to Stamford Bridge after the Blues were denied in their attempts to sign John Ruddy from Norwich City.
"Once I found out Chelsea were interested in me, it didn't take very long to make up my mind," he told Sky Sports News.
"I was looking to find a club that was right for me. Having spoken to the manager, he made it very easy to decide that Chelsea was the right club.
"The size of the club, the ambition of the club and the opportunities at the club ticked all the right boxes. This is the opportunity to join one of the best clubs in the country, if not the world."