Morata spend four seasons at Atletico's academy before signing for rivals Real Madrid. He also played for Juventus before joining Chelsea in July 2017 and scored 24 goals in 72 appearances for the London club.
His last appearance for Chelsea was against Nottingham Forest on Jan. 5 where he scored both goals in a 2-0 FA Cup victory.
"Morata has proven himself as a prolific goalscorer in some of Europe's most competitive leagues," Atletico said on their website.
"With Morata's arrival, we add a very talented striker to our club, who has the ability to score with his feet and his head thanks to his height... and to combine with his team mates."
(Reporting by Simon Jennings in Bengaluru, editing by Pritha Sarkar)
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