Winstanley joins from Brighton & Hove Albion, where he worked for eight years, initially as Talent Identification Manager and then as Head of Recruitment.
Winstanley played a major role as Brighton built a reputation for finding and developing talent.
The moves reunites Winstanley with Chelsea manager Graham Potter, who recently made the move from Brighton.
Working alongside then Sporting Director Dan Ashworth and his eventual successor David Weir, Winstanley found success on numerous occasions on the TransferRoom platform.
On his new role, he said: "There is a real sense of excitement and momentum around the new ownership and this project. I’m looking forward to working with such an outstanding group of colleagues as the club moves into a new era."
Chelsea chairman Todd Boehly and co-controlling owner Behdad Eghbali added: "Paul is highly respected and is a key senior addition as we continue to build a world class sporting team with a huge depth of talent, ambition and commitment who will work closely with us to drive Chelsea forward."
In recent weeks, Chelsea have overhauled their recruitment and scouting department, with Laurence Stewart arriving from AS Monaco as Technical Director, Joe Shields from Southampton as Co-Director of Recruitment and Talent and Kyle Macaulay, also formerly of Brighton, as a recruitment specialist.
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