Goal revealed on Monday evening that the 20-year-old forward had agreed to move to Goodison Park, and was in Merseyside to sign the necessary paperwork.
The Belgium international will bolster Roberto Martinez's attacking options after Marouane Fellaini completed a late move to Manchester United and Victor Anichebe went to West Brom.
"Romelu Lukaku will spend a second season on loan at a Barclays Premier League club with a move to Everton completed," the west London club announced on their official website.
"The 20-year-old striker's season at Goodison Park will follow on from a year of significant progress at West Bromwich Albion when he featured in 38 games and scored 17 goals, becoming the highest-scoring teenager in the Premier League since Michael Owen in 1998/99."
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Martinez made his move for Lukaku after Demba Ba's proposed loan move to Arsenal fell through despite prolonged negotiations on Monday.
Lukaku has not started any of Chelsea's four matches this season despite a successful loan spell at West Brom in 2012-13 - and Baggies boss Steve Clarke unsuccessfully attempted to bring the forward back to the Hawthorns again late on Monday.
With Jose Mourinho signing Samuel Eto'o from Anzhi Makhachkala to provide competition for Fernando Torres and Ba, options would have been limited for Lukaku at Stamford Bridge this season.