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The 20-year-old joins the European champions in a deal reported to be worth £25 million.
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.
He left the capital for Internacional in December 2010 and has played at every level of international football from Under-15 to Under-20.
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.
Capable of playing as an attacking midfielder or winger, he is viewed as one of his country's most exciting talents.
Meanwhile, Frank Lampard admits Chelsea face a period of adjustment to the influx of new recruits but is excited about the coming season.
"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.
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