The 22-year-old joins for an undisclosed fee, putting pen-to-paper on a four-year deal at Ewood Park.
Salford-born, Marshall started out at Manchester United as a schoolboy before moving on to Crewe Alexandra where he worked under Rovers' assistant manager Terry McPhillips and played in the same youth team as Grant Hanley.
At 17 the winger signed for Stoke City on professional terms, enjoying several loan spells over a two-and-a-half-year period at Northampton Town, Cheltenham Town, Carlisle United and Sheffield Wednesday, gaining first team experience.
Impressive displays whilst on loan with Sheffield Wednesday prompted Leicester City to make a move for Marshall in January 2012. He ended the season strongly for the Foxes with 18 appearances and four goals.
The 2012-13 campaign saw Marshall maintain his fine form as a mainstay in Nigel Pearson's side, impressing in Leicester's 3-0 win over Rovers in February, a game in which he set up the first two goals. He also earned international recognition for England's Under-21s.
Leicester would go on to reach the play-offs, as Marshall finished the season with five goals from 43 games.
Having failed to feature for the Foxes in their first six matches of the new campaign, Rovers boss Gary Bowyer moved swiftly to secure the services of the highly-rated midfielder.
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