Arthur Staple of Newsday first reported the deal, which is valued at $38.5 million and an average annual value of $5.5 million for salary cap purposes.
The Chicago Blackhawks dealt Leddy in a deal made to get them under the cap, with the Islanders sending back prospects T.J. Brennan and Ville Pokka and the rights to free-agent goaltender Anders Nilsson.
Leddy is averaging 20:12 minutes a game—up nearly four minutes from his workload with the Blackhawks last season—and has already scored a career-high eight goals to go with 25 points.
The Islanders are surrendering 2.79 goals per game, 24th in the NHL and down dramatically from last season’s 3.18 figure, which ranked 28th out of the league's 30 clubs.
The Isles were 34-37-11 last season, finishing last in the Metropolitan Division with 79 points.
In 61 games this season, New York has already exceeded that total. At 39-20-2 and 80 points, the Islanders have a two-point edge over the New York Rangers for the division lead. The Pittsburgh Penguins (77 points) and Washington Capitals (76) are also close behind.
Leddy was the 16th overall pick in the 2009 NHL Entry Draft by the Minnesota Wild, who traded his rights to the Blackhawks in February 2010 along with defenseman Kim Johnsson for defenseman Cam Barker.
The durable Leddy hasn’t missed a game since 2011-12, his first full season in the league, and he had two assists and averaged 14:21 in the playoffs when Chicago won the Stanley Cup in 2012-13.