[Boro](http://www.thenorthernecho.co.uk/sport/football/middlesbrough?ref=au) are set to pay an initial fee of around £1m for the 20-year-old, who is poised to sign a four-and-a-half year deal with the Teessiders.
A product of Chelsea's youth academy, who also spent time in the youth ranks of AFC Wimbledon, Castledine signed his first professional contract with the Blues in the summer of 2022.
He made his senior Chelsea debut against Boro in the second leg of the Carabao Cup semi-final in January 2024, which saw the Teessiders suffer a 6-1 defeat at Stamford Bridge.
An England Under-19 international, he spent last season on loan at League One side Shrewsbury Town, making 26 senior appearances and scoring two goals.
He returned to Chelsea in the summer, but was sent back out on loan to Huddersfield Town, where he spent the first half of the current campaign.
He made 19 senior starts and eight substitute appearances for the Terriers, who are currently fourth in the League One table, scoring 12 goals and claiming two assists.
His ten league goals from his 23 league outings mean that only four players have scored more than him in the second tier.
An attacking midfielder, known for his creativity, he can also play in a wide-attacking role on either flank.
Boro have had to fight off considerable competition for Castledine, with Watford having held talks with Chelsea earlier in the week.
Birmingham and Norwich were also credited with an interest in the youngster, whose loan terms meant that Chelsea had to recall him in the first two weeks of January in order to move him on.
That recall clause has now been triggered, enabling the Blues to hold formal talks with Boro.
Chelsea are understood to have demanded a sell-on clause as part of the deal, but Boro are delighted to have won the battle to sign such a highly-rated youngster.