The 18-year-old won Chelsea’s Academy Player of the Year last season but sparked fears of a possible exit with less than 10 months remaining on his previous contract.
The youngster is highly regarded in west London and academy director Neil Bath has been pushing to renew his deal for several months.
A key part of negotiations has been putting together a development plan with a loan stint in Hull seen as vital to Vale’s reasoning for staying in west London.
Hull won the race ahead of several other Championship clubs and are willing to offer the player the chance to compete for a spot on their right wing.
It ends fears of another youth exodus after Chelsea lost a host of top talent last summer, including Tino Livramento and Lewis Bate who quickly went on to make their Premier League debuts with Southampton and Leeds.
Thomas Tuchel has already given Vale five senior appearances and included him among the substitutes in the recent 2-1 away defeat to Southampton.
Vale’s long-term potential was explained to Chelsea’s new owners ahead of the contract renewal going through, with the Boehly-Clearlake group keen to continue investing large sums in the academy.
They see a world-class youth setup as an integral part of their roadmap to success and are already impressed with what they have found behind the scenes at Cobham since buying the club.