Leicester City were shockingly relegated from the Championship to League One in 2025-26, just one year after dropping down from the Premier League.
As a result, several players have opted to leave, with Fatawu, 22, the latest, joining newly promoted Ipswich for a reported £20 million, a record sale for a League One club.
The winger, who scored 16 goals in 100 games for Leicester since joining from Sporting in 2023, has now signed a five-year deal with Gary O'Neil's side.
"The ambition the club has is very exciting and I'm looking forward to being a part of that as we prepare for the Premier League season," Fatawu told Ipswich’s website.
"After speaking to the manager, I know what the expectation is and I'm looking forward to meeting my team-mates and starting work.
"I have played against Ipswich a few times during my time in England and I know how passionate the supporters are for the club, so I'm excited to play for them and show them what I can do."