The Switzerland midfielder has signed a deal until the summer of 2015 with Huub Stevens' men, who will compete in the Champions League this season.
"We are very happy that Tranquillo has decided to join us," Schalke general manager Horst Heldt said.
"He has enormous qualities and is very flexible, which he has proved for Leverkusen as well as the Switzerland national team."
Barnetta has played 59 times for his country, scoring eight times - with two of those coming against England as Switzerland claimed a 2-2 draw at Wembley in a Euro 2012 qualifier.
The 27-year-old moved to Leverkusen from Swiss outfit St Gallen in 2004 before spending his first season in the Bundesliga on loan with Hannover.
He would eventually become a regular at the BayArena but he was not offered a new deal at the end of last season, which allowed Schalke to swoop.