James, who will wear the No 20 shirt, moves to Leeds on a five-year deal for an undisclosed fee.
Leeds' director of football Victor Orta told the club’s official website: “As a player we feel Daniel is an excellent fit for a Marcelo Bielsa team. He is quick, direct and works hard – we look forward to him joining up with the squad, finally!”
James, 23, made his Premier League debut in 2019 and has appeared 50 times in the competition, scoring six goals and assisting a further seven.
James could make his Leeds debut when the Whites host Liverpool on Sunday 12 September.