Retsos headed coach Heiko Herrlich's wish list as the German club seeks a return to the Bundesliga elite after a disappointing 2016/17 season that saw them finish 12th and miss out on European football.
Considered one of Greece's biggest footballing talents, 19-year-old Retsos was reportedly a target for Arsenal, Tottenham Hotspur and Atletico Madrid.
Having played only one senior season in Greece during which he captained Olympiakos at 18, he can play both in the heart of the defence and as a fullback.
"Panagiotis Retsos had several offers from top clubs which play internationally this season," said Leverkusen sports director Rudi Voller. "So it is even more gratifying for us that he decided to join Leverkusen... (He) is an investment for the future of this club."
Retsos has been called up for Greece's upcoming World Cup qualifiers against Estonia and Belgium on Friday and Monday respectively.
(Reporting by Karolos Grohmann; editing by John Stonestreet)
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