Hudson-Odoi did not play a part in any of Chelsea's opening four Premier League games this season.
The three-time England international made 28 appearances across all competitions for Chelsea last term before suffering a season-ending achilles injury in March.
Hudson-Odoi came through the Chelsea youth ranks and has gone on to make 126 appearances, scoring 16 goals and laying on 21 assists.
The 21-year-old came close to joining Bayern Munich back in 2019 before deciding to extend his stay with the Blues but will now move to Germany after good recommendation by former Leverkusen star Kai Havertz.
Speaking to the club's website after the move was confirmed, Hudson-Odoi said: "The move to Germany is really exciting for me and I can play in the Champions League with Bayer 04 Leverkusen.
"That combination is really attractive and I'm keen to get to know the club, the fans and the Bundesliga. [Chelsea team-mate] Kai Havertz only had good things to say about it to me."
Leverkusen managing director Simon Rolfes added: 'We have signed a fast and penetrative winger.'
'He has everything to be able to help us immediately.
'Callum has played over 100 games for Chelsea and proven himself in the Premier League as well as in the Champions League. This will give our attacking game another special component.
'We're very happy this transfer has gone through.'
Chelsea have the option to recall Hudson-Odoi as early as January.
