“Thank you and good luck,” Chelsea wrote on their Twitter handle.
Thank you and good luck, @AlvaroMorata. 👊
— Chelsea FC (@ChelseaFC) July 6, 2019
Concise News understands that Morata, 26, will remain on loan at Atletico for the 2019-20 season before signing permanently on July 1, 2020.
He netted six goals in 17 games last season while on loan in the Spanish capital.
The Spain international joined Chelsea from Real Madrid in 2017 for a then-club record of £58m but struggled to adapt to life in the Premier League, scoring 24 times in 72 appearances.
The Spaniard had said last month that Chelsea never “appreciated or loved him” which led to a lack of confidence.
“We would like to thank Alvaro for his contribution and wish him the best of luck for the future,” a statement on Chelsea’s website read.
As for Morata, he tweeted: “Happy. It’s official. Now I will have time to return with work and goals all the effort of the club and the affection of the fans. Thank you!!!”