The 17-year-old will link up with the Blues U18s side, but is also likely to feature for John McGreal's U21s in the season ahead.
Atherton started his career at Glenavon and made headlines in 2022 when he became the youngest senior footballer in the United Kingdom after making his debut for their first team in the Irish League Cup aged only 13 years and 329 days, missing out on the world record by ten days.
He went on to make 32 appearances for them, scoring once, before joining Chelsea's academy in July 2025, signing a professional deal in the October and has since been a regular in their U17 and U18 teams.
“I’m delighted to be here and can’t wait to get started," Atherton said.
“I hope to offer a lot of creativity and attacking threat going forward and obviously working as hard as possible to get better every day."
Academy Manager Ben Chenery added: “We are extremely pleased to announce the signing of Chris Atherton from Chelsea.
“Chris is an exciting attacking player we believe possesses big potential which we look forward to continuing to develop through the next stage of his career.”
The right-winger represented Northern Ireland at U16 and U17 levels before switching allegiance to the Republic of Ireland for whom he has been capped twice at U19 level.
Town have signed other young players from Chelsea’s academy in recent seasons in the form of left-back Somto Boniface and forward Frankie Runham.