The 20-year-old joins the European champions in a deal reported to be worth £25million.
He is part of Brazil's squad for London 2012 and played in the 2-0 warm-up victory over Team GB last Friday.
Oscar, full name Oscar dos Santos Emboaba Junior, is a product of the Sao Paulo youth set up. Capable of playing as an attacking midfielder or winger, he is viewed as one of his country's most exciting talents.
He left the capital for Internacional in December 2010 and has played at every level of international football. His Brazil debut arrived in September last year when he came on as a substitute in a 0-0 draw with Argentina, and he has scored once in six caps.
Coach Roberto Di Matteo said: "He is a fantastic player, one of the youngest to push through to the Brazilian national team and he will be a fantastic signing for us.
"Oscar is a very exciting young talent, a creative midfield player who scores goals. He will add a lot of options and solutions for us in midfield."
He added: "It will be a challenge to make sure we have the right balance within the team so we will have to see how we fit the team together with all the players.
"The club has always been competitive, looking to improve, get better and fight at the top end of the league so it will only give us a better chance in the Premier League."
Meanwhile, Frank Lampard admits Chelsea face a period of adjustment to the influx of new recruits but is excited about the coming season.
Eden Hazard and Marko Marin have already joined the Champions League winners, while Oscar signed on Wednesday.
Lampard, who is on Chelsea's tour to America, believes Chelsea will benefit from the increased competition for places.
"We proved to be a great team and a great unit in the second half of last season," he told the club's official website, www.chelseafc.com. "This year maybe we are slightly different because we have more new young players coming in.
"There might not be the settled togetherness that we had on the pitch at that side because we had been together a long time. But there is an excitement about our team as well and that's probably the main difference."