Tielemans spent the second half of the 2018/2019 season on loan at the King Power Stadium and impressed with three goals and four assists in 13 Premier League appearances.
The 22-year-old Belgian midfielder’s impressive performances attracted interest from clubs including Manchester United and Tottenham Hotspurs but Leicester manager Brendan Rodgers has managed to keep hold of the former Anderlecht youngster.
Tielemans is the Foxes’ third arrival in this summer’s transfer window following the captures of Luton Town’s James Justin and Newcastle United’s top goalscorer last season, Ayoze Perez.
“It is such a great feeling to sign for this club. Ever since I arrived on loan last season, all the players, the staff and the fans have been fantastic with me, so I’m thrilled to be able to become a Leicester City player,” Tielemans told Leicester’s official website.
“I believe that we have the talent in our squad to achieve something special and for any player, that’s an exciting thing to be a part of. I really can’t wait to get started again with this club and do everything I can to help my teammates.”
Leicester City have now spent close to £80m in the transfer market as the club looks to improve upon last season’s ninth place finish.
Manager Rodgers added: “I’m delighted that Youri has chosen to be part of Leicester City’s journey. It’s an incredibly exciting time for this football club and to be able to bring players of Youri’s quality here is an indication of the hunger for success we have here.
“Youri fit brilliantly into the squad last season, he’s already shown that he’s capable of making an impact in the Premier League and he adds another option to an incredibly talented group of players here at Leicester City.”
Tielemans has won 23 caps for the Belgium national team and was part of their squad that finished third at last summer’s World Cup.
