The 20-year-old has penned a five-year contract at the King Power Stadium.
"It feels good and I'm happy to be part of this team," Iheanacho told Leicester's website.
"I know the ambition of the team and speaking with the manager, he let me know what I need to do – to help the team achieve what they want. I was convinced and I'm happy to be here.
"I was happy speaking with the manager, knowing what the team wants. It gives me more confidence that I will fit in this team and hopefully I’ll achieve a lot."
Foxes manager Craig Shakespeare is confident Iheanacho will add value to his unit.
"It's a great signing for us. Kelechi is an enormously talented player that has shown a huge amount of promise at every level in which he's played," said Shakespeare, who has also added Vicente Iborra, Eldin Jakupovic and Harry Maguire to his roster in the off-season.
"We've tracked his progress for some time, so we know how much quality he'll bring to the squad. He's young, he's hungry, he’s ready for the next stage of his development and I'm delighted that will be with Leicester City."
Iheanacho scored 21 goals in 64 games for the Citizens since making his debut for the English giants in August 2015.
Leicester will start the new Premier League season with a trip to Arsenal on August 11.