The 25-year-old midfielder spent last season on loan at Serie B team Modena, scoring three goals in 41 games.
However, he will now head to the second tier in England with Leeds, who are facing their 11th successive season outside of the Premier League.
Bianchi made over 60 appearances for Sassuolo, finding the net on just four occasions.
He previously spent six years with Piacenza having come through the ranks, playing 81 times.
Leeds have already signed goalkeepers Marco Silvestri and Stuart Taylor this close season.
‘There was great chemistry from the start. I’d jump up with a smile on my face, as I knew that if I won the jump and touched the ball, he’d find it for a finish’: How Kevin Keegan proved the perfect strike partner at Liverpool
‘I only played with Gazza for a year, but could still write a book about it! People remember him for his behaviour, which is a shame because he was incredible’ Paul Gascoigne's former team-mate reveals what playing alongside the Englishman was really like
