The Brazil international will move to the Chinese Super League in a £60 million deal at the start of the January transfer window.
The 25-year-old has started just five Premier League games this season and only made four brief substitute appearances since Antonio Conte’s switch to a 3-4-3 formation at the start of October.
Oscar was signed for £19m in July 2012 and has won the Premier League, the League Cup and the Europa League during his four-and-a-half years at Stamford Bridge.
A statement from Chelsea read: ‘Chelsea Football Club and Shanghai SIPG have agreed terms for the permanent transfer of Oscar.
‘The 25-year-old will join the Chinese Super League team at the beginning of the January transfer window.
‘He has been a Chelsea player for four-and-a-half years, helping us lift the Premier League, League Cup and Europa League as well as scooping two Chelsea Goal of the Season awards after stunning strikes against Juventus in 2012, on his full debut, and QPR in 2014.
‘Skilful and tenacious, Oscar has been highly regarded by fans, players and staff during his time as a Blue, scoring 38 times from 203 Chelsea appearances.’