The 19-year-old has been on loan with Robin Dutt's side since the start of the season, and having initially penned a six-month deal, was intended to be a short-term solution to replace the injured Rene Adler.
Leno has impressed, however, to the point that Leverkusen purchased his services from Stuttgart and offered the player a contract until June of 2017, to which he has agreed.
"In Bernd Leno, we have secured the services of one of the most outstanding goalkeeping talents in Germany in the long term," Leverkusen sporting director Rudi Voller told the club's official website.
"Bernd has helped us through a very difficult situation in the past few months. He superbly filled in for the injured Rene Adler, and played a big part in helping us qualify for the knockout stages of the Champions League."
Leverkusen chief executive Wolfgang Holzhauser echoed Voller's statements.
"Bernd Leno has completely justified the confidence we placed him, despite his youth and complete inexperience in professional football," Holzhauser said.
"In the past weeks and months, he has always been a good performer in the team. With his excellent performances, he has earned a long-term contract."
Leno was delighted with his full transfer to Leverkusen and thanked his former club Stuttgart for helping him develop into the player he is today.
"I feel very well at Bayer and am grateful that the club have given me the chance to play in the Bundesliga and the Champions League," Leno said.
"I would like to pay back this confidence. The club had several other options, but they chose me when Rene Adler had to have surgery."
"This impressed me very much, so I wanted to stay in Leverkusen. I thank VfB for a good time. There I received a great education that enabled me to make the next step."
Leno made his debut in his side's second Bundesliga game of the season against Werder Bremen.
He has since featured in every match for Leverkusen, and has been promoted to the Germany Under-21 national team.
A fee for his release was not disclosed, but is estimated to be in the region of seven million euros.
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