Concerns were raised by locals in Middleton after more than a dozen vans pitched up at the land in Bodmin Road, Middleton.
Local Labour councillor Kim Groves explained 12 caravans had initially pitched up, and more arrived earlier today (Friday).
She said they were believed to have moved on from another unauthorised site in Seacroft.
She added council bosses were seeking court action to get the convoy moved - but stressed: “We are working closely with police to see what can be done. Residents are concerned and rightly so.”
Coun Groves said the land was owned by Leeds City Council and was currently on sale for housing.
A householder who lives just yards from the site, which is currently overgrown with hedges, said the vans started moving in on Wednesday night and “everybody is really worried”.
He claimed there had been “total negligence” by the council as it had failed to block off the land properly.
The arrival of the illegal convoy comes a week after a council plans panel granted a 10 year extension to a temporary traveller and gypsy site in the city centre.
The YEP reported previously that the city had forked out more than £3 million in a decade to clean up and remove illegal traveller camps,
But despite the massive bill, the city has made huge leaps in its recent work to reduce the costs - with illegal camps slashed by almost 60 per cent overall.
A spokeswoman for Leeds City Council said today: “The council was made aware that a group of travellers had arrived on a piece of land at Bodmin Road in Middleton earlier this week.
“We have since been monitoring the area and are taking the appropriate action through the courts to ensure this illegal encampment is vacated and cleared up as soon as possible.
“Once the encampment has vacated we will be reviewing the security measures at the site.
Councillor Peter Gruen, former executive board member for planning and neighbourhoods - who oversaw much of the city’s cleanup efforts on the issue - said the summer months were traditionally busier for traveller convoys as families visit Leeds for fairs and weddings.
He said the council will take “the most robust action we can take if there are illegal encampments” like the one at Middleton.
But he stressed the incident was a rarity nowadays.
“Five years ago it used to be happening every week, with different groups pitching up,” he said.
“The legal and clean-up costs were minimal last year compared to before, but we can still say ‘you come at your own peril if you pitch up illegally’.”
Leeds’s long-term development masterplan - its Core Strategy - has identified a need for 62 authorised traveller caravan pitches in the city up to 2028.
Around 25 permanent pitches are to be managed by the council, along with nine pitches for temporary stopping, and up to 28 pitches may be developed privately on smaller sites for families throughout Leeds.