"Chill out" originated on the east coast, NYC specifically and was a term used by heroin addicts who were going through heroin withdrawals. One of the many symptoms of heroin withdrawal is getting the chills and fellow junkies as a way to say see you later would tell each other to "chill out" meaning stay well,
don'
t get
sick or don't go into withdrawals from not having heroin.
See also "Dope
Sick"