Chelsea sign Kovacic from Real Madrid

English Premier League giants Chelsea have signed Mateo Kovacic on a five-year deal from Real Madrid.

The midfielder initially moved to Stamford Bridge on loan last summer, helping the Blues to win the Europa League in May.

He has now completed a permanent move for a reported fee of STG40 million ($A72 million), with the Blues expected to appoint Frank Lampard as their new manager in the coming days.

"I really enjoyed my season on loan with Chelsea, I feel comfortable at the club and like London and the Premier League very much. I am very happy to be able to join permanently," Kovacic told the club's official website.

"We had a successful year, winning the Europa League and I hope I can make a big contribution in the coming seasons."

The 25-year-old - who had been at Madrid since 2015 - made 51 appearances in all competitions for Chelsea, who finished third in the Premier League, but did not score.