De Bruyne, 22, has signed a five-and-a-half-year contract with the Volkswagen-backed club, keeping him in Lower Saxony until June 2019.
Neither club confirmed the transfer fee, although German media have suggested that it is in the region of £17m.
De Bruyne joined Chelsea in a £6.5m deal from Genk in 2012 but has managed just three league appearances for the Blues since and spent last season on loan at Werder Bremen. The 22-year-old Belgian had been keen to leave Stamford Bridge in January and has now secured a move to Wolfsburg.
We wish Kevin De Bruyne all the very best of luck at Wolfsburg and we hope that he has a fantastic career ahead!