According to Fabrizio Romano, the deal was finalised on Wednesday evening and is worth in the region of €21m in total, made up of a €19m fixed fee with a further €2m in add-ons tied to performance-related targets.
The figure sits below other reported valuations of the deal, which some outlets have put closer to €25m including bonuses, but the structure broadly matches what Sky Sports and others have described as an initial fee of around £16.3m plus incentives.
Chavarría, 28, becomes Chelsea's latest signing under head coach Xabi Alonso as the club continues reshaping its squad following Marc Cucurella's departure to Real Madrid. The left-back made 44 appearances for Rayo Vallecano last season, helping the Madrid club reach the Conference League final, and is expected to compete with Jorrel Hato for a starting role, or potentially operate further forward as a wing-back if Alonso opts for a back three.
The move continues a broader shift in Chelsea's recruitment strategy this summer towards more experienced signings, following the arrivals of Danny Welbeck, 35, and Jordan Henderson, 36, as the club looks to add know-how to a squad that finished 10th last season.
Chavarría's arrival comes amid a busy summer of departures from Stamford Bridge that has also included Cucurella, Tyrique George and Andrey Santos, with Chelsea retaining a sell-on percentage on any future transfer involving the Spaniard.
Chavarría's fee is well below the €50m release clause in his Rayo contract, reflecting the fact he has spent only four seasons in Spain's top flight since joining from Real Zaragoza in 2022.
Last season he ranked among the division's most productive full-backs for crosses delivered from open play and set pieces, while also featuring prominently in defensive metrics such as blocked crosses and possessions won in his own third - underlining the two-way profile that convinced Alonso to identify him as a priority target for the left side of defence.