Chelsea has signed Atletico Madrid forward Joao Felix on a season-long loan.

Arsenal and Manchester United were also interested in signing the 23-year-old, but he preferred a transfer to Chelsea.

The Portugal international has also agreed to a one-year contract extension with Atletico until the summer of 2027.

"Chelsea is one of the great teams in the world and I hope to help the team reach their objectives," said Felix.

"I am very, very happy to be here and very excited to play at Stamford Bridge."

When Atletico Madrid paid Benfica £113 million for Felix in 2019, he became the sixth most expensive footballer in history.

He went on to score 34 goals and assist 18 times in 131 games across all competitions.

Felix was a member of Portugal's World Cup team, scoring one goal in five appearances as his nation advanced to the quarterfinals.

Since then, he has appeared twice for Atletico, scoring in a 2-0 victory against Elche on December 29 before playing 73 minutes in a 1-0 loss to Barcelona on Sunday.

Felix has five goals and three assists in 20 appearances for Atletico this season.

He joins Chelsea during the January transfer window, joining Benoit Badiashile, David Datro Fofana, and Andrey Santos. He joins the team 10th in the Premier League, 10 points away of a top-four berth.

They are also out of both cup competitions, having lost 4-0 to Manchester City in the third round of the FA Cup last weekend.

This was the sixth loss in nine games in all competitions for manager Graham Potter, who took over for Thomas Tuchel in September and has the club's board's backing.