Atletico Madrid have signed England midfielder Conor Gallagher from Chelsea on a five-year deal, the LaLiga and the Premier League clubs have announced.

The 24-year-old Gallagher, who had been at Chelsea since the age of eight, signed until 2029 with Atletico for 42 million euros ($A69 million), according to media reports.

"We wish Conor the very best as he begins a new chapter in his career," Chelsea said in an official announcement published on their website.

Gallagher spent the early part of his senior career on loan, including spells at Premier League clubs West Bromwich Albion and Crystal Palace, and did not make his Chelsea debut until 2022.

Last season Gallagher started 37 Premier League games, missing just one league match through suspension, and spent most of the campaign as club captain due to injuries to Reece James and Ben Chilwell.

Gallagher had one year left on his Chelsea contract, and new manager Enzo Maresca recently stated he had been offered a new contract.

He made his England debut in 2021, has 18 caps and made five appearances at Euro 2024 where England reached the final, losing 2-1 to Spain.

Gallagher and Atletico's other new signings will be unveiled later on Wednesday in a party open to fans at their Metropolitano stadium, headlined by former Manchester City forward Julian Alvarez.

Atletico have spent around 200 million euros ($A330m) following deals for Spain defender Robin Le Normand and Norway striker Alexander Sorloth.

After a disappointing 2-2 draw at Villarreal to start the LaLiga season on Monday, Atletico host last year's surprise packages Girona on Sunday.

Meanwhile, Chelsea have signed forward Joao Felix from Atletico Madrid on a seven-year deal.

Financial details were not disclosed, but English media reported Chelsea paid around STG46 million pounds ($A89m) to secure the 24-year-old's return to Stamford Bridge.

Felix impressed during his six-month loan spell at Chelsea in the 2022-23 season, scoring four goals in 20 appearances. He spent the last campaign on loan at Barcelona, scoring 10 goals in 44 games.

Atletico signed Felix from Benfica in 2019 for a club-record fee of 126 million euros ($A207m). He scored 34 goals in 131 matches and helped them win the LaLiga title in 2021.

"I'm really happy to be back at Chelsea and I can't wait to get started. I can see some familiar faces from the last time I was here, which is always nice," Felix said in a statement.

One player who won't be involved at Chelsea is Raheem Sterling after he was told by new head coach Maresca he is not in his plans, the PA news agency understands.

Sterling has been excluded from the squad to face Swiss side Servette in the Europa Conference League on Thursday, having also been left out of the group that lost 2-0 to Manchester City in Sunday's Premier League opener.

with PA