Figures released yesterday revealed 45 per cent of the city's residents are white British – compared with 61 per cent in 2001.
About 49 per cent of the population is made up of people from Asian, African or Caribbean or mixed race backgrounds and about 5 per cent are white but not British.
The numbers were the latest to be released by the Office of National Statistics from the 2011 Census.
The city's 93,335 Asian or British Asian Indians make up the next biggest ethnic group in Leicester, accounting for 28 per cent of the population – an increase of two per cent since 2001.
Leicester now has the highest proportion of people of that ethnic group in England and Wales, where three per cent of the total population is Asian or British Asian Indian.
Meanwhile, two per cent of people in Leicester are Asian or British Asian Pakistani, equalling the average for England and Wales.
City mayor Sir Peter Soulsby said: "It has always been recognised we have a diverse community in Leicester, and I think that is a great strength. It is quite interesting these figures should come in the year the Queen chose to start here jubilee tour here – obviously it is a strength that she recognised, too.
"These statistics are so useful as they help remind us of the people in the city.
"I think you will find a large proportion of people who, for instance, might say they are Asian will actually be Leicester born and bred."
Sir Peter said the figures would be analysed to make sure the council was providing services suited to the whole population.
The statistics, which are made up of information provided by residents, also revealed 65 per cent of the city's population was born in England.
This is lower than the average for England and Wales, which is 84 per cent.
The religious make-up of the city's population has changed drastically since the last census in 2001.
The most common religion is still Christianity. However, it is now the religion of 33 per cent of city residents, compared with 45 per cent in 2001. The next biggest group is people who said they had no religion. This accounted for nearly a quarter – 23 per cent – of people in the city, and is up six per cent since the last census.
Canon Barry Naylor, the Bishop of Leicester's adviser on urban issues, said he thought the change was down to people feeling like they could be "more honest" about their religious beliefs.
"I think in the old days people would just say 'put me down as C of E,' because they felt they should," he said.
"I think when people are more honest, it helps to show where we are.
"Also, we seem to be at a time when the church seems to be doing its best to alienate people, and that means we are not very effective at communicating what the Christian gospel is about.
"That could be a factor here."
The city has the third highest percentage of Hindu people in England and Wales – 15 per cent.
Leicester has the 11th highest percentage in England and Wales of Muslims, who account for 19 per cent of the population, an increase of eight per cent since 2001.
Overall in Leicester, 51 per cent of residents class themselves as white, regardless of where in the world they are from originally, and 49 per cent as not white.
Suleman Nagdi, chairman of the Federation of Muslim Organisations, said: "I think we are seeing what makes Leicester so unique – there is no such thing as a majority.
"I think it shows we need to keep working hard to keep our relationships going."
The figures released yesterday were the second set of statistics released from the 2011 census.
Population figures were revealed in July, when the Mercury reported the city has 329,900 residents – 16 per cent more than in 2001 when the figure was about 282,800 – the fastest growth of any city in the region.
More than a quarter of Leicester's population – 27 per cent – is aged 20 or under, making it the youngest population in the East Midlands.