The 25-year-old has signed a four-year contract at King Power Stadium and becomes the Foxes' fourth summer signing after the arrival of attacking midfielder James Maddison, Northern Ireland global defender Jonny Evans and Portuguese full-back Ricardo Pereira.
Leicester City sign Liverpool goalkeeper Danny Ward for £12.5m
Ward's arrival, however, will likely only serve to increase speculation regarding Schmeichel's future at the King Power - particularly with reports on Thursday morning suggesting that Roma would be looking at the Danish global as a potential replacement for Liverpool-bound Alisson.
The Manchester City goalkeeper has joined Southampton, with 2.5% of the fee going towards Norwich. "I've come here to develop my all-round game and hopefully help deliver some more success".More news: Montenegro govt says remains USA strong ally despite Trump comments
Another Liverpool player - Wales winger Harry Wilson - had been earmarked as a potential loan target, but a chase that involved most of the Championship officially ended earlier this week as the 21-year-old joined Derby for the season.
Leicester boss Claude Puel added: "I'm very happy to welcome Danny to Leicester City Football Club".More news: Benedict Cumberbatch Is Thrilled with the Avengers 4 Storyline
Ward, 25, who has made four appearances for Wales but only managed two for Liverpool, has signed a four-year contract and the Reds have included a 20% sell-on clause in the deal.
Alisson's arrival casts further doubts over the amount playing time Ward would get at Anfield after failing to break into the squad last season.More news: Trump ready to go all-in on taxing Chinese imports
Ward, who started for Liverpool at King Power Stadium in last season's Carabao Cup, has represented Wales at schoolboy, Under-17s, Under-19s, Under-21s and senior worldwide level and is now the third Welsh global in the squad along with King and George Thomas.