The Black Cats have added Xhaka to their already growing squad following promotion to the Premier League as they bid to survive in their first season back in England's top flight for eight years.
Xhaka arrives with a wealth of experience, having played 225 times in the league for Arsenal, where he was captain and won the FA Cup twice.
The Swiss midfielder then joined Leverkusen, where he enjoyed an unbeaten league campaign in 2023/24 as the club won their first-ever Bundesliga title.
"I’m very proud to be here. When I spoke to the Club, I was excited and I felt the energy, and the mentality that all the people and players have," Xhaka said.
"It’s exactly what I wanted, and I have a very good feeling. We are back to where this Club needs to be, and we want to stay here to write our own history.
"I feel that I’m ready to help the team with my experience, but with quality as well. We need to find ourselves on the pitch, but I don’t think this will be a big problem. It’s been a long time to wait, but I’m here now and I’m looking forward to it."
Xhaka was nominated for the Ballon d'Or in 2024 and finished in 16th place, while he is also Switzerland's all-time record appearance holder with 137 caps.
