The Australian wicketkeeper-batter has represented the club in the County Championship this season, scoring 681 runs at 45.4
Peter Handscomb has extended his stay with Leicestershire, replacing Ajinkya Rahane in the club's One-Day Cup squad.
India international Rahane had been due to link up with the squad in June before his involvement in the World Test Championship final and India's Test tour of West Indies delayed his arrival.
He has since opted to take a break from cricket throughout August and September following his surprise recall to the national side.
Australian wicketkeeper-batter Handscomb has represented Leicestershire in the County Championship this season, scoring 681 runs at 45.4.
Rahane is taking a break from cricket [Gareth Copley/Getty Images]
Handscomb made 22 ODI appearances for Australia between 2017 and 2019 [Robert Cianflone/Getty Images]
Across his career, the 32-year-old has scored 3,856 runs at 37.43, including four centuries and 23 half-centuries, in 128 List A appearances. In 22 ODI outings for Australia between 2017 and 2019, he scored 632 runs at 33.26 (one century, four half-centuries).
He has previously represented both Middlesex and Yorkshire in the One-Day Cup.
Leicestershire's director of cricket, Claude Henderson, said: "Firstly, we are fully understanding of Ajinkya's situation. He has experienced a hectic schedule in recent months, both in India and travelling with the national team, and we accept his wishes to recover and spend some time with his family.
"We have been in constant communication with Ajinkya and accept how situations can change quickly in cricket. He is extremely grateful for our understanding and still hopes to play for Leicestershire one day.
"Thankfully, we had planned for a situation like this, and we are delighted Peter is staying on with the team. He brings many qualities alongside his batting and wicketkeeping, including strong leadership, which is a massive help to Lewis (Hill) and the rest of the guys in our changing room."