Ward becomes the Foxes fourth signing of the summer transfer window, and will offer competition to Kasper Schmeichel and Eldin Jakupovic.
"I've come here to develop my all-round game and hopefully help deliver some more success".
The move does of course suggest that Loris Karius is now likely to be kept at Anfield as understudy for the coming season, with some debate surrounding Simon Mignolet's future at the club. Danny Ward could prove to be a spectacular signing for Leicester City.
The Wales worldwide also represented his country at the European Championships in 2016, replacing the injured Wayne Hennessey for their opening clash against Slovakia.
"I'm very happy to welcome Danny to Leicester City Football Club", Leicester manager Claude Puel said.
Sturridge, who joined Liverpool from Chelsea in January 2013, enjoyed his best season in a red shirt when he played alongside Raheem Sterling and Luis Suarez in 2013-2014, scoring 21 goals in 29 league games.
The 25-year-old Wales global and long-time Liverpool servant had been suggested as a possible Carrow Road arrival by some, having been on loan at Huddersfield Town during their Premier League promotion season as a Stuart Webber recruit.
Move to Leicester would help him to reignite his career and overall it would be a very win-win sort of move for both the club and player.
The goalkeeper made crucial saves during Huddersfield's penalty shootout victory over Sheffield Wednesday in the play-off semi-final and repeated his heroics in the spot-kick win over Reading in the final at Wembley.
Ward has opened talks with the Foxes over he last 24 hours.
All five of Leicester City's pre-season fixtures can be seen live on LCFC TV.