The 25-year-old has penned a five-year deal at the King Power Stadium.
He joins the Foxes ahead of their Championship opener against Coventry City on Sunday.
Mavididi had spent eight seasons at Arsenal, before joining Juventus in 2018, becoming the first English player to appear for the club since David Platt in 1992.
He only managed one appearance in Turin, though, and was then sent out on-loan to Dijon.
It was from there where Montpellier secured his services on a permanent deal.
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The Derby-born forward did manage 21 goals in 91 league appearances for the Ligue 1 side, but will now look to kick-start his career in England.
"I'm honestly happy and delighted to be here," he told Leicester's official website.
"Speaking to the manager and some of the staff here, it was a no-brainer for me.
"Obviously the size and history of the club speaks for itself, the training ground, the stadium.
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"Personally, I wanted to come back to England, I felt like it was time to come home and continue my football here."
Mavididi broke Chris Waddle's record for the most games played in France's top tier by an English player back in April.