Vardy spent 13 seasons at the King Power Stadium and has been dubbed the Foxes' 'greatest-ever player' by the club themselves.
The 38-year-old departs having won both the Premier League and FA Cup, as well as the Community Shield, after scoring almost 200 goals in 496 appearances.
Leicester signed the Englishman for £1 million from Fleetwood in 2012, and 13 years later, Vardy has cemented himself as both a club and Premier League legend.
The striker was pivotal to their Premier League title win in 2016/17 and finished the campaign as the league's Player of the Season.
Just three years later, he would win the Golden Boot after netting an impressive 23 goals in 2019/20.
“Jamie is unique. He is a special player and an even more special person," Leicester chairman Aiyawatt Srivaddhanaprabha said.
"He holds a place in the hearts of everyone connected to Leicester City, and he certainly has my deepest respect and affection. I am endlessly grateful for everything he has given to this football club.
“Although Jamie’s time with us as a player is ending, he and his family will always be welcomed back to King Power Stadium with open arms after all he has achieved.
"On behalf of everyone at Leicester City, I wish Jamie and his family the very best for the future and I know our supporters will join us in giving him the send-off he deserves at the end of this season.”
Vardy's final game for Leicester at the King Power comes against Ipswich on May 18th, while his last-ever match is against Bournemouth on May 25th.