Manager Claudio Ranieri, struggling to be heard amid the cheering crowds, called the scenes "special" and thanked supporters, saying "all the city is here".
Star striker Jamie Vardy also heralded the team's "unbelievable achievement", as fans chanted "championes" in streets decked out in the Foxes' colours of blue and white.
Captain Wes Morgan and his team-mates set off from a packed Jubilee Square with the trophy - just two years after a similar parade to celebrate the side's promotion to the top flight, and only a year after they were nearly relegated.
Ranked as 5,000-1 outsiders by some bookmakers at the start of the season, Leicester clinched the title two weeks ago and finished the 2015/16 campaign 10 points ahead of second-placed Arsenal.
A party atmosphere has been building all day as supporters gathered to laud the remarkable achievements of football's "miracle team".
Scarf-waving revellers crowded into every thoroughfare along the parade route.
There was also a big Italian contingent in the city, honouring countryman Ranieri who has spearheaded this year's successful campaign.
A huge red, white and green tricolour bearing the Italy national team slogan 'Forza Azzurri' took pride of place at the busy East Gates junction, with bare-chested supporters chanting their heroes' names.
Speaking to Sky Sports News on the upper deck of the bus, Ranieri said: "It's unbelievable
All the city is here
It's something special.
"I think this is because the team won but also played with heart and soul and the people understood this.
"I can only say thank you to all the people."
England striker Vardy said of Leicester's achievement: "It's still not sunk in but I'm sure it will over time
It's been an unbelievable achievement.
"When we got promotion from the Championship, obviously it wasn't as big as this - just look at the scenes, it's mad."
The club's Thai owner Vichai Srivaddhanaprabha, who took over in 2010, could also be seen at the back of the bus smiling at the hordes of fans
As the bus rolled on, souvenir-hunters ripped down banners emblazoned with 'Champions' or scooped up fistfuls of the blue and silver confetti littering the street in the parade's wake, shoving it into their pockets.
Under a cloudless sky, placards with images of King Richard III's head edited to fit a Leicester strip bobbed above the crowd.
The re-burial of the king in 2015 was the last time the city witnessed anything approaching these scenes, with some speculation the former monarch may have been a good luck charm for the football team.
The parade - official recognition of Leicester's status as champions of England for the first time in the club's 132-year history - concluded in the city's Victoria Park in front of tens of thousands of supporters
The squad, manager, owner and backroom staff assembled on stage as the crowd were treated to replays of all of Vardy's 24 goals during the campaign on big screens.
Ranieri, asked about the prospect of Leicester's first ever Champions League campaign next term, told the crowd: "Yes
Keep dreaming, keep dreaming
Don't wake up."
He added: "Yes (I enjoyed the season) but now I enjoy today, for all our fans
"I want to say thank you for everybody, because all season they push behind us.
"Every time we were down, they push, they push, they push."
Source : PA
Source: PA