Leo, 38, was pictured with the beautiful blonde in Nice following his appearance at the Cannes Film Festival. The hot new couple were also seen watching the Monaco Formula One Grand Prix on Sunday before joining friends on a luxury yacht.
"They've been getting quite close over the last week," a source revealed to the New York Daily News. "There is definitely chemistry there."
Hamburg-born Toni, who stands at 6ft tall, first hit the runway at the tender age of 15 when she debuted exclusive pieces from the Calvin Klein Spring/Summer 2008 collection.
Since then her career has gone from strength-to-strength, and she modelled for the likes of Dior, Hermès and Dolce & Gabana before joining Victoria's Secret in 2011.
Leo has been romantically linked with several Victoria's Secret stars in the past, including one of the brands current 'Angels', Erin Heatherton. Leo and Erin dated for a year before breaking up in November 2012.
The Los Angeles-born actor also went out with Brazilian model Gisele Bündchen on-and-off for four years, and split from Israeli model Bar Refaeli in 2011 after nearly six years together.
Leo's latest venture on the silver screen helped get this year's Cannes Film Festival off to a glamorous start. The Great Gatsby's premiere on the festival's opening night drew some of the biggest names in Hollywood to the French coastal city.
Proudly standing with the film's leading lady, Carey Mulligan, Leo looked dapper in a tuxedo. He received the loudest cheer of the night from the crowds, many of who had been camping out since Sunday night to catch a glimpse the Titanic actor.
Carey and Leo were joined by their fellow cast members, Isla Fisher and Tobey Maguire, as one of the year's most anticipated films was unveiled for the very first time.