Following the dismissal of Thomas Tuchel on Wednesday morning, the West Londoners moved swiftly to appoint Potter as their new first-team manager on Thursday afternoon.
The 47-year-old has penned a five-year contract at Stamford Bridge and leaves Brighton & Hove Albion after just over three years on the South Coast.
Speaking to the club's official website on his appointment, Potter said: "I am incredibly proud and excited to represent Chelsea FC, this fantastic football club.
"I am very excited to partner with Chelsea's new ownership group and look forward to meeting and working with the exciting group of players and to develop a team and culture that our amazing fans can be proud of."
According to the Evening Standard, Chelsea are now hoping to appoint a new sporting director before the World Cup begins in the middle of November after Marina Granovskaia handed in her resignation in July.
The report adds that new owner and chairman Todd Boehly is keen for Potter to be involved in the decision-making process.
A shortlist of candidates is understood to have already been drawn up, which includes former Liverpool executive Michael Edwards, who left his role at Anfield earlier this summer.
A potential move for Edwards is believed to be unlikely at this stage, however, as he is allegedly looking to take an extended break away from football after 10 years with Liverpool.
According to a recent report, former Barcelona full-back Maxwell and Monaco's sporting director Paul Mitchell are also being considered by Chelsea's hierarchy.
The appointment of a new sporting director will allegedly see the club's ownership take a step back from their role in transfers, but they will still be able to discuss recruitment strategies as well as other operations at Stamford Bridge.
Potter will now be focused on settling in along with the five members of staff who have joined him in moving from Brighton to West London.
The Englishman was set to take charge of his first game as Chelsea boss in Saturday lunchtime's encounter at Craven Cottage against Fulham.
However, following the death of Her Majesty The Queen on Thursday evening, it has been reported that Premier League fixtures will be postposed this weekend.
Premier League officials are understood to have held talks with the Government on Thursday night to discuss the situation, and an announcement is expected to be made on Friday morning.