Premiership champions Chelsea have signed teenager John Obi Mikel after agreeing to pay £12 million to Manchester United who  were also chasing the Nigerian midfielder.

The deal ends an 18-month battle for the talented player.

Chelsea will also pay Mikel's former club Lyn Oslo four million pounds. Half of the payments to United and Lyn will be paid in a year's time.

Mikel's future has been uncertain since he said he wanted to play for Chelsea, with whom he trained in 2004, despite signing for United in April last year.

The Nigerian international, who had been due to join United from Lyn in January, said he had been put under pressure to sign for Alex Ferguson's side. For several weeks last year at the height of the dispute, Mikel went missing from Lyn.

United asked Fifa to intervene more than a year ago but soccer's world governing body said it would await results of legal proceedings in Norway.

Chelsea said the financial settlement put an end to the affair. The payments, they said, had been made solely to allow Mikel to resume his career and United would support them in any work permit application that was necessary.

Mikel joins a powerful Chelsea squad, strengthened in midfield by the signing of Germany captain Michael Ballack last month.

With England stalwart Frank Lampard, France's experienced Claude Makelele and the powerful Michael Essien already in Chelsea's first-choice midfield, the 19-year-old will have to work hard to get a start.

Chelsea have also signed Ukraine striker Andriy Shevchenko from AC Milan and 20-year-old Feyenoord forward Salomon Kalou in the last week.