The Oscar winner will play a brand new character in the as-yet untitled film, set several decades after the original story, Alcon Entertainment said.
Harrison Ford, who played police officer Rick Deckard in the 1982 cult movie, will be reprising the role.
Ryan Gosling also stars in the sequel which will be directed by Denis Villeneuve, whose films include Sicario and Prisoners.
Villeneuve has described the new film - released in October 2017 - as an "extension" of the original.
Leto was seen recently in cinemas in Suicide Squad, in which he played The Joker.
Details of his Blade Runner character are yet to be revealed.
The cast also includes Robin Wright, Ana de Armas, Sylvia Hoeks, Carla Juri, Mackenzie Davis, Barkhad Abdi and Dave Bautista.
Ridley Scott's original - set in 2019 - saw Deckard hunting lifelike robots, known as replicants, in a futuristic Los Angeles.
It was based on Philip K Dick's novel Do Androids Dream Of Electric Sheep?.
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Jared Leto has joined the cast of the sequel to Blade Runner.