The deal includes an option to buy if the 31-year-old impresses at the 2016/2017 French champions.
Slimani arrived at Leicester City for a then club-record fee of £28m in the summer of 2016 from Sporting Lisbon but was unable to pin down a regular starting spot at the King Power Stadium, scoring just eight goals in all competitions during his time at the club.
Slimani has spent the past two years on loan at Newcastle United and Turkish outfit Fenerbahce after falling out-of-favour at Leicester.
In a statement, the Ligue 1 side declared: "AS Monaco are pleased to announce the season-long loan, with an option to buy, of 31-year-old Islam Slimani from Leicester."
Speaking upon the announcement, Monaco's vice president, Oleg Petrov, declared: "Welcome to Islam Slimani. He is a powerful striker and scorer who has demonstrated his qualities in the Portuguese and English championships in particular, but also in international competitions.
"Islam will strengthen our offensive potential and will also put its experience to benefit the group and the youngest."
Slimani, who was a member of the Algeria side that recently won the African Cup of Nations in Egypt, has expressed his delight at joining Leonardo Jardim’s men.
"I am very happy to be involved with Monaco, a big club that aims to fight for the first places in the championship and to qualify for European competitions," Slimani said.
"I will give everything to help the club achieve its goals."
