The 23-year-old spent last season on loan at League Two side Wycombe Wanderers and was named their Young Player of the Year after featuring 52 times in all competitions.
Blackman, a former England youth international, is Blades manager Chris Wilder's seventh signing ahead of the new Championship season.
"Jamal has been our number one target right the way through the summer," Wilder told the club's website.
"There was a situation with his new contract at Chelsea so we've had to be patient but we are delighted that he is with us now because there were a few clubs in for him.
"He provides genuine competition in an important area of the pitch."
Blackman, who is expected to make his first appearance for United during Friday's friendly at Eastleigh, is the 20th player to be loaned out by Chelsea already this summer.