The Premier League leaders will pay €33 million for the Colombia international, who starred at the 2014 World Cup and had attracted strong interest from Manchester United last summer.
Chelsea had previously been told that the player would not be allowed to move for less than his €35m release clause but were able to reach a compromise by including Salah as part of the deal.
The Egypt international, who joined the Blues last January from Basel, already had a similar agreement in place with Roma but Chelsea called a halt to that move once they learned of Fiorentina's interest in the player.
Despite Chelsea's confidence that a deal for Cuadrado could be struck, the Premier League leaders had sounded out alternative targets - including Newcastle midfielder Moussa Sissoko - after seeing bids for the Colombian and Shakhtar Donetsk star Douglas Costa in a bid to keep their options open.
But an agreement has now been reached, with Salah, who has been unable to usurp Willian on the right flank and made just eight appearances in all competitions this season, heading to Florence.
Fellow out-of-favour winger Andre Schurrle has also been heavily linked with a Stamford Bridge exit in January, though manager Jose Mourinho insists the German remains a part of his plans.
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