We provide a rigorous analysis of fault-tolerant quantum computation in the presence of local leakage faults. We show that one can systematically deal with leakage by using appropriate leakage-reduction units such as quantum teleportation. The leakage noise is described by a Hamiltonian and the noise is treated coherently, similar to general non-Markovian noise analyzed in Refs. quant-ph/0402104 and quant-ph/0504218. We describe ways to limit the use of leakage-reduction units while keeping the

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... quantum circuits fault-tolerant and we also discuss how leakage reduction by teleportation is naturally achieved in measurement-based computation.