Defoe will remain with Spurs until February 28 before departing in a deal set to be worth £6 million, a record for the American league, after the clubs agreed terms on Wednesday.
"This is a great opportunity for Jermain and he feels it is one that he wishes to pursue," manager Tim Sherwood told Tottenham's official website.
|4/1||Jermain Defoe is 4/1 with PaddyPower to score the last goal in Spurs v Crystal Palace|
The England international is one of three new recruits for Toronto, joining Dwayne De Rosario and ex-Roma midfielder Michael Bradley at BMO Field.
It brings to an end an association with Spurs stretching back to 2004 to Defoe, who left for Portsmouth for a year between January 2008 and 2009 and has scored over 140 goals for the north Londoners across both spells.
"I have had a fantastic time here and the fans have always been amazing to me," the striker continued. "I am grateful for the opportunity for myself and my family to experience living overseas and for me to play in MLS with a contract that will take me to the age of 35.
"I have no doubt I shall be coming back as a fan supporting the team in the years to come too."
The deal also includes an agreement for the two clubs to play a pre-season friendly when Tottenham tour North America in the summer.