Multiple outlets in the UK have claimed Gallagher will pen a new contract with the Blues before joining their Premier League rivals.
The 20-year-old was impressive on loan at Charlton and Swansea City last season.
Gallagher featured in the 1-1 friendly draw with Brighton at the AMEX.
Roy Hodgson will be delighted with Gallagher's signing, having already recruited talented midfielder Eberechi Eze from QPR last week.
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