The 22-year-old will finalise a switch from Everton tonight after Leeds held off interest from Hull City to secure his services for next season.
Pennington made three appearances for Everton last term under Ronald Koeman, the first of which was against Liverpool in the derby at Anfield.
The Warrington-born defender has been knocked down the pecking order at Goodison, however, following the £25m arrival of Michael Keane earlier this summer and so the Blues have decided to send him out on loan.
Pennington profited from loan spells earlier in his Everton career, particularly at Coventry City, and will hope a season under new Leeds head coach Thomas Christiansen can force his way into Koeman's plans for the 2018-19 campaign.
Thanks to the Liverpool Echo for this article.