At the end of "The Invasion of Time", Leela feel in love with a Time Lord and stayed with him. K9 Mark I decided to stay with Leela to explain to her what she don't know. Nothing more of her is heard from in the TV series after that. However, her fate is explored in the novels and audio plays. She is presumed to have eventually died on Gallifrey with the rest of the population.
According to the spin-off K9, it's possible that K9 mark one escaped Gallifrey and wound up in the 2050s.
For more information, see tardis:Leela, especially the sections "Life on Gallifrey" & "Life after Gallifrey".
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