The 19-year-old centre-back will move to the King Power in a deal worth £30m.
"AS Saint-Etienne reached an agreement on Tuesday evening with Leicester, the current leader of the English Premier League, for the transfer of their defender Wesley Fofana," the Ligue 1 club revealed in a statement published on their official website.
"The amount of this transfer is the largest ever obtained by the club.
"The decision to sell the player was taken collectively by the Management Board and the shareholders. ASSE accepted Leicester's exceptional offer, especially given the uncertain economic context caused by the health crisis.
"In addition, even if it presented, for the 2019-2020 financial year and for the tenth consecutive year, a positive financial result, the club sees for the moment its room for manoeuver considerably reduced by the consequent commitments made in as part of his previous sports project, in 2018, 2019 and until the beginning of summer 2020.
"Trained at the club and winner of the Gambardella Cup 2019, Wesley Fofana revealed himself last season, under the direction of Claude Puel. It is indeed with the General Manager of ASSE, appointed head of the Greens in October 2019, that he has made spectacular progress, thus establishing himself at the highest level.
"Last season, Wesley Fofana played 14 matches in Ligue 1, six in the Coupe de France, including the final against PSG, two in the Coupe de la Ligue and two in the UEFA Europa League. At only 19 years old, he is now considered one of the greatest French talents of his generation."