He will begin his role after the end of this summer's European Championship.
Conte won three Serie A titles as Juventus coach between 2012 and 2014, including an unbeaten campaign in 2011-12.
"I am very excited about the prospect of working at Chelsea Football Club. I am proud to be the coach of the national team of my country and only a role as attractive as manager of Chelsea could follow that," Conte said in a statement.
Chelsea appoint Conte as next coach
"I am looking forward to meeting everyone at the club and the day-to-day challenge of competing in the Premier League. Chelsea and English football are watched wherever you go, the fans are passionate and my ambition is to have more success to follow the victories I enjoyed in Italy.
I am happy we have made the announcement now so everything is clear and we can end the speculation. I will continue to focus on my job with the Italian national team and will reserve speaking about Chelsea again until after the Euros.
Italy face Belgium, Ireland and Sweden in this summer's tournament.
Conte had been linked with the Chelsea job since just before Jose Mourinho's departure, and speculation has increased in recent months, leading to today's announcement.
Conte's 'record of consistent success'
Antonio Conte soll Chelsea übernehmen
Image credit: AFP
Prominent Chelsea figures revelled in the appointment of Conte, the club's fifth Italian coach after Gianluca Vialli, Claudio Ranieri, Carlo Ancelotti and Roberto Di Matteo.
Director Marina Granovskaia said: "We are very pleased to have recruited one of the most highly regarded managers in world football and we are equally pleased to do so before the end of the current season. This aids our future planning. I would also like to take this opportunity to thank Guus Hiddink, who has done a great job since he joined us in December."
Chairman Bruce Buck added: "Antonio Conte has a record of consistent success in his career as a manager and as a player. We look forward to welcoming him to Stamford Bridge and are confident he will find all he needs to maintain that high standard of achievement."
Legal issues hanging over new man
Conte still faces potentially damaging match-fixing charges and a preliminary hearing was held in Cremonese on Monday - the day he was appointed Chelsea's manager for the summer. As reported by news agency AP:
[Conte's] reputation is on the line in the match-fixing case, where he is accused of sports fraud. The match under investigation involving him is Siena's 1-0 win at Albinoleffe in May 2011. Siena's 2-2 draw at Novara, also in May 2011, was dropped from the inquiry. Conte, who has denied wrongdoing, served a four-month sports ban during the 2012-13 season when he was with Juventus.
Conte was banned by a sporting court for 10 months in 2012, later reduced to four on appeal. He is accused of failing to report the match in question had been fixed - rather than being implicated in the fix itself.
Chelsea's options were limited as they sought to find a new big-name manager. Pep Guardiola is going to Manchester City, Jurgen Klopp's at Liverpool, Mauricio Pochettino isn't likely to give up Champions League football at Tottenham and they'd sacked Jose Mourinho. But Conte is an excellent appointment, a manager who will bring organisation and clarity back to Stamford Bridge.
As our own Jim White explained on this site recently: "This is a proper football man they have hired; a clever, committed, ambitious manager of skill and experience, yet still with plenty of hunger. His appointment has come about after a careful and considered process. There has been nothing panicked or slapdash about it; from start to finish it has reeked of professionalism and intelligence."