After drawing 0-0 in Greece two weeks ago, the Blues were always favourites to join Manchester United and Arsenal in the quarter-finals of the competition, and so it proved as Avram Grant's side dominated the outclassed visitors from the first whistle.
The Blues were without Petr Cech who had an ankle injury, so Carlo Cudicini made only his second start since December in goal.
Olympiacos had beaten Werder Bremen and Lazio earlier in the season but appeared to be suffering an inferiority complex as they immediately let Chelsea take a grip on the game.
After three minutes Joe Cole was sent clear by Didier Drogba but slid his shot against a post - although the linesman had already flagged for offside.
However, Chelsea moved ahead two minutes later. Frank Lampard latched on to a quickly taken throw-in and whipped a cross in for the unmarked Michael Ballack to head powerfully past Antonios Nikopolidis.
Olympiacos tried to settle, but their approach play was pedestrian and predictable.
In the 18th minute Joe Cole, who was very lively throughout, crossed for Drogba to crash a shot over the bar and, such was Chelsea's dominance, even Claude Makelele ambled forward to get in a shot that Nikopolidis saved comfortably.
Seven minutes later the Blues doubled their lead when Nikopolidis did well to block Ballack's fierce shot, only for the ball to drop at the feet of Lampard who lashed it into the net from all of one yard out.
At the start of the second half, Olympiacos appeared to have set out their stall for a damage-limitation exercise and Chelsea will surely expect Barnsley to give them more of a test in the FA Cup sixth round this weekend.
Three minutes after the restart Chelsea scored their third. A corner found its way through a ruck of players to Salomon Kalou who controlled the ball before forcing a shot over the line from close range.
For over an hour the Greek side showed the type of form that suggested they would struggle to give Derby County a game, but they did show some spirit in the closing stages as Chelsea eased off.
With seven minutes left substitute Fernando Belluschi lashed a long-range strike against the bar with Cudicini stranded before the Blues shot-stopper got down well to smother Ieroklis Stoltidis' free-kick.
However, the visitors were a well-beaten side by then as Chelsea eased through what must have been one of their most comfortable matches of the season.