Ward joined the Reds from Wrexham at the beginning of 2012, and progressed through the ranks to become third goalkeeper last season.
But despite impressing on loan with Aberdeen and Huddersfield Town, the Welshman was unable to cement a regular place, making just three first-team appearances for the club.
With the arrival of Alisson in a world-record £65 million move, Ward dropped further down the pecking order, prompting Leicester to move swiftly for his services.
The 25-year-old has now signed a four-year deal with the Foxes, who are believed to have paid £12.5 million for his services, along with a 20 percent sell-on clause.
“I’m delighted to be here and I’m really looking forward to the future with this football club,” Ward told LCFC TV.
“I’ve come here to develop my all-round game and hopefully help deliver some more success.
“The club has had that in recent years and hopefully there’s more to come in the future.”
Leicester are claimed to have no plans to part ways with current No. 1 stopper Kasper Schmeichel, but saw last season’s second choice Ben Hamer leave for Huddersfield in June.
Ward should, therefore, serve as competition for Schmeichel, though Claude Puel is also able to call upon the experienced Eldin Jakupovic as cover.
But without senior prospects under Jurgen Klopp this should be seen as a productive move for Ward—and given the fee received, a positive deal for Liverpool.
All the best, Danny!