The 26-year-old heads to Stuttgart as Javier Hernandez arrives at Leverkusen from Manchester United in a $26 million deal.
"I'm really looking forward to this new challenge with Stuttgart and I would like to play my part in ensuring we enjoy better sporting fortunes in the coming weeks and months," Kruse said.
The Socceroos wide man is back to full fitness after suffering an Achilles injury in the AFC Asian Cup final against Japan earlier this year.
He will join Socceroos team mate Mitchell Langerak at Stuttgart, although the goalkeeper could miss the next eight weeks with injury.
Kruse played half an hour as a substitute in Leverkusen's loss to Bayern Munich on the weekend, which could turn out to be his final appearance in Leverkusen colours.
Kruse joined Leverkusen in a $2 million transfer from Fortuna Dusseldorf in April 2013, and he went on to score twice in 21 Bundesliga appearances.
Stuttgart sporting director Robin Dutt said Kruse is the perfect fit for his new club.
"Robbie Kruse knows the Bundesliga very well," Dutt said.
"He has been involved in all of preseason for Leverkusen and has played a few times this season.
"With his pace and mobility, he is a perfect addition for our game."
Kruse could make his debut for Stuttgart in its Bundesliga match away to Hertha BSC on 12 September.