His contract is for five years and $23.3 million, with a $9 million reciprocal buyout, according to school officials.
Kelly, the former head coach at the University of New Hampshire, came to national prominence as the head coach at the University of Oregon. The Bruins had just fired Jim Mora just a week earlier following a loss to USC and Kelly was the subject of all the coaching carousel rumors.
Chip Kelly was a hot commodity on the coaching market and with good reason.
The 54-year-old coach had a celebrated run in Eugene, Oregon, posting a 46-7 record and leading the Ducks to an appearance in the 2011 BCS title game, which Oregon lost to Auburn.
Kelly also had been considering the vacant Florida job, sources previously told ESPN.
Chip Kelly is no longer a candidate for coaching vacancy at Florida, a person with knowledge of the situation told USA TODAY Sports.
The college game knows Kelly for the massive success he had at Oregon. Offensive coordinator Jedd Fisch was named interim head coach for the remainder of the season. The NCAA sanctioned Kelly with "failure to monitor".
The decision by Kelly to move away from the Gators potentially clears him to focus attention on the opening at UCLA. The former Oregon Ducks coach now is an analyst with ESPN. Under Mora, the Bruins dropped six straight games against ranked programs.