The Argentine, 27, has penned a four-year deal with the Premier League club.
Ulloa joined the Seagulls from Almeria in January 2013 before going on to score 25 goals in 52 appearances.
"Initially we did not want Leo to go, but once he made it clear to us he wanted to join Leicester and play in the Premier League, it was then a case of ensuring we received our valuation," Brighton chairman Tony Bloom told the club's official website.
"I would like to thank him for his efforts and wish him well in the Premier League."
Ulloa scored 16 goals in 38 games for Brighton during the 2013-14 campaign.