Perez moves to the King Power Stadium after spending five years at St. James’ Park, where he joined from Spanish outfit Tenerife in 2014 for £1.5m.
Ayoze Perez was Newcastle United’s top goalscorer last season with 12 goals and his signing will help ease the burden on Jamie Vardy, who finished the 2018/2019 season with 18 Premier League goals for the Foxes.
"I'm very happy and very pleased. I'm very proud to be part of the Leicester family and I can't wait to get started," Perez told LCFC TV.
"The club want to keep growing as much as they can and that's something I like. I spoke with the manager and that was important. That made me feel very comfortable about the decision to come here."
The 25-year-old is Leicester City manager Brendan Rodgers’ second summer signing after capturing Luton Town defender James Justin earlier in the transfer window.
Brendan Rodgers said: "I think Ayoze will be a wonderful addition to the squad. He's quick, has a good eye for goal and he's experienced in the Premier League too.
"I think he's a player who will excite our supporters, and his style is one that I believe complements the options and quality that we already have here at the football club."
Perez is the second high profile figure to leave Newcastle United within the past week after manager Rafael Benitez left the Tyneside club for Dalian Yifang in China following the expiration of his contract.
In his five seasons at Newcastle United, Perez made 195 appearances and scored 48 goals.
