The 19-year-old says he is delighted to be joining the club and hopes to emulate his hero Frank Lampard, who left the London outfit at the end of the season
The 19-year-old midfielder has represented Croatia at Under-21 level and was named in Niko Kovac's provisional squad for the World Cup, though he did not make the final cut.
"I am very happy because I am now a Chelsea player," Pasalic told the club's official website.
"I am very impressed by the training ground and I must thank everybody at Hajduk. This is now a new start in my career.
"I am a central midfielder, my favorite player is Frank Lampard and so I am very happy to be a Chelsea player."
Born in Germany, Pasalic only made his first-team debut in 2013 but scored 11 goals in 30 league appearances last season as Hajduk finished the Croatian campaign in third place.
Pasalic will link up with Chelsea's senior squad for preseason training on Wednesday.