The 24-year-old defender passed a medical and agreed personal terms at Stamford Bridge over the weekend.
Boulahrouz's arrival comes as a relief for Chelsea boss Jose Mourinho who's team is suffering from a shortage of defenders.
"In a short squad and, in a country where you can have only 16 players in a match, it's important to have cover for many positions," said Mourinho.
"Now I have three options for the centre -- Ricardo, Boulahrouz and John Terry. I can have Paulo or Boulahrouz on the right side and I can have Wayne Bridge or Boulahrouz on the left."
Boulahrouz, who was capped 15 times by his country and appeared in Holland's last two matches at this summer's World Cup finals, began his career Dutch side RKC Waalwijk before joining Hamburg in 2004.
His arrival diminishes Ashley Cole's chances in joining Chelsea this season.