Iborra, 29, has agreed a four-year deal with the Midlands club and becomes Craig Shakespeare’s second big signing of the summer, following Harry Maguire’s move from Hull last month.
The defensive midfielder impressed the Leicester boss when he played against the Foxes in last season’s Champions League clash and has been influential for Sevilla over the past four seasons.
Iborra will link up with his new team-mates when they jet out to Austria for a pre-season training camp in Austria next week.
Iborra, speaking to LCFC, said: “I’m very happy to be here with Leicester City and I’m looking forward to experiencing the Premier League with my new team-mates next season.
“Everything about this Club seems good and it’s been great to meet my new team-mates. I’ve already spoken with them about the city and the Club so I can’t wait to get started.”
Shakespeare added: “I’m absolutely delighted that Vicente has joined us. He’s player with such a good pedigree from his time in Spain with Sevilla and he adds some really strong competition to our squad.”