The French side declared earlier in the week that the move would be the biggest sale in its history, with reports that Leicester is paying in the region of £30 million ($54.1 million) for Marseille-born Fofana.
Now the deal taking the 19-year-old to England has been sealed, Leicester announced on Saturday (AEST).
Fofana said: "I'm very happy to be here. I've watched Leicester City closely since they won the title and they're a top club in the Premier League.
"I know I will learn a lot from the players and the manager here, which is one of the main reasons I came. I can't wait to get started."
Fofana was described by Saint-Etienne as "one of the greatest French talents of his generation" on Wednesday (AEST), when it revealed the centre-back was heading to the Foxes.
He was called up for France Under-21 this week.
Saint-Etienne described Leicester's bid as "exceptional, especially given the uncertain economic context caused by the [COVID-19] health crisis".
Leicester stunned Manchester City 5-2 on Monday (AEST) to make it three wins from three so far under manager Brendan Rodgers in this season's Premier League. It also has a UEFA Europa League campaign ahead.
Fofana played 14 matches in Ligue 1 last season, made two appearances in the UEFA Europa League, and helped Saint-Etienne reach the Coupe de France final, where it lost 1-0 to Paris Saint-Germain.