The Schlecks caused a minor upset recently by quitting Team Saxo Bank, owned and managed by former Tour de France winner Bjarne Riis, and many of their former teammates have followed suit.
O'Grady, a former winner of the gruelling Paris-Roubaix one-day classic, has also been instrumental in Saxo Bank's successes on the Tour de France in recent years, displaying leadership qualities in his role as road captain.
His experience on the world's biggest bike race, in which the younger of the Schleck siblings, Andy, has finished runner-up the past two years, is highly-valued.
"Stuart is a real legend and probably among the most phenomenal athletes of his generation," the new team's general manager Brian Nygaard said.
"He has won everything worth winning on the track, as well as an impressive list of victories on the road, topped off by claiming one of the most beautiful recent editions of the Paris-Roubaix."
"I enjoy the challenge of being road captain," O'Grady explained.
"It is not as easy as it sounds. I have to use my knowledge, to keep the 'young guns' cool, calm and collected when the going gets tough. I remind the guys to work as a team, to support each other, to respect each other, and to give 100 percent."
Though O'Grady will be entering his 17th year as a professional, he still has personal ambitions.
"Personally I want to have another big classics season," he revealed. "I have been a bit unlucky with injuries and broken bones since winning Roubaix in 2007. So it would be nice to win some big races with the team and of course help the Schlecks win the Tour de France!"
The Luxembourg Pro Cycling Project has recently signed several top names, including German trio Linus Gerdemann, Fabian Wegmann and Jens Voigt and Denmark's Jakob Fuglsang.
Italian sprinter Daniele Bennati has also joined.
Andy Schleck is likely to start the 2011 Tour de France as one of the big favourites, having finished runner-up to Spaniard Alberto Contador in 2009 and 2010.
Contador is currently provisionally suspended and awaiting word on a possible sanction after testing positive, during the 2010 race, for trace amounts of the banned weight loss/muscle building drug clenbuterol.
Team Leopard Racing is currently rumored to have been unable to secure a paying main sponsor for the team's 2011 season.
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