A volley from Shinji Okazaki and a Riyad Mahrez penalty put Leicester two goals ahead in the first half and they managed to see off a revival from the visitors who pulled one back with a fine individual effort after the break from Jose Izquierdo.
The result moved the Premier League champions to 13 points from five matches and not only ensured their spot in the knockout stages, but also their status as Group G winners with one match to spare.
It was a mixed performance, however, from Claudio Ranieri's side who were scintillating in the first half but much more like the team that has struggled in the Premier League this season after the break as the visitors pegged them back.
Leicester's fans, however, are unlikely to care about a sloppy second-half display after moving forward in Europe's elite club competition just seven years after they were playing in the third tier of English football and 18 months after narrowly avoiding relegation from the top flight.
The hosts ripped through the Bruges defence to open the scoring after five minutes as an incisive counter attack of the sort that characterised their run to the English title last season ended with Okazaki swivelling to volley home Christian Fuch's cross.
A thoroughly dominant first-half display then received further reward 15 minutes before the break when Marc Albrighton was tripped by Dion Cools and Mahrez slammed his penalty down the middle of the goal to double Leicester's lead.
They received a shock to the system when Izquierdo ran from the halfway line and rifled into the roof of the net after 52 minutes.
It was the first goal Leicester had conceded in the Champions League and it prompted a nervy retreat into their shell as Bruges pressed for an equaliser, but they held out to reach another remarkable milestone in 2016.
(Reporting by Toby Davis, editing by Pritha Sarkar)
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