The 20-year-old shot-stopper will remain at Birmingham City until the end of the season, before joining Tony Pulis's side this summer.
When it became clear that Birmingham were willing to sell the England international in January, several of the Premier League big clubs - including City and Chelsea - were interested in snapping him up.
But Butland spurned their advances, and to the surprise of some, opted to sign for mid-table Premier League side Stoke City.
Speaking to The Times, Butland revealed why he turned down the Champions League clubs in an interview with the newspaper.
He said: "I had the chance to speak to Chelsea but I didn't feel like I needed to.
"It's a fantastic club and it would be a great honour to play for them at some stage. But I've got a chance to join a club where I feel I can better develop my game and take it to the next level, which I didn't feel at some of the other clubs I rejected.
"I turned Manchester City down about a year ago. Again I was flattered but Joe Hart is their undisputed No 1 and he was a main factor."
Birmingham's perilous financial position meant Stoke picked up something of a bargain. Last summer, reports claimed Southampton made a £6m offer for the keeper, but the west Midlands club rejected the bid. Stoke's fee is believed to be less than that figure.
Butland was called up to the England squad for Euro 2012 after injury to John Ruddy, and he won his first international cap in the 2-1 win over Italy in August last year.