Anelka, 32, has reportedly agreed a deal worth in the region of ?175,000 a week to the striker, who recently had a transfer request accepted by the Blues.
Shenhua announced on their official website that Anelka would join them when the January transfer window opens and he has also been pictured posing with the club's shirt, although his move has yet to be confirmed by Chelsea.
Anelka is in the final year of his Stamford Bridge contract and it became clear earlier this season that his three-year stay with the Blues would not be extended. He and team-mate Alex were banished from Andre Villas-Boas' first-team squad after handing in transfer requests, although both had enjoyed only very limited action under the new manager.
Anelka could link up at Shenhua with fellow Frenchman Jean Tigana, who is being earmarked to take charge of the club.
Former Arsenal, Real Madrid, Manchester City and France star Anelka has already been welcomed by his prospective new team-mates, with captain Yu Tao writing on Weibo, the Chinese equivalent of Twitter: "It's impossible not to be excited by this - a warm welcome to our new team-mate!"
Goalkeeper Wang Dalei added: "Tell Anelka he made his new team-mates really proud!"
A host of rival clubs were linked with Anelka, including West Ham and Major League Soccer side Montreal Impact, but moving to China would make him arguably the biggest signing in the country's history.
He may not be for long if Shenhua or Super League rivals Dalian Aerbin succeed in their pursuit of Chelsea team-mate Didier Drogba.
Drogba, who has yet to agree a new deal with the Blues to replace the one that expires at the end of the season, has been offered a three-year contract worth more than £200,000 a week by Aerbin.
Source: PA
Source: PA