The two Canadian rivals exchanged midfielders as both teams look to shake up their rosters.
The Impact will also receive allocation funds in the deal.
“We felt the need to acquire an experienced MLS central midfielder like Collen Warner was necessary as we approach the [World Cup] break, coupled with the loss of Michael [Bradley] to the U.S. national team,” TFC general manager Tim Bezbatchenko said in a statement. “Collen provides a different look in the midfield for us and to be successful in this League you need to be multidimensional."
Warner, 25, made 66 appearances in all competitions since joining the Impact ahead of the 2012 MLS season. He was originally drafted 15th overall by Real Salt Lake in the 2010 draft and made 37 league appearances for the Utah side in two seasons.
Nakajima-Farran, who turned 30 on Friday, joined TFC after an extensive career in Europe and Asia. Capped 30 times by Canada, the wide midfielder has made stops in Singapore, Denmark, Australia and Cyprus, and he signed with Toronto on March 28, 2014. In his seven combined appearances for the Reds, he has scored twice.
“We are very pleased to be able to add Issey Nakajima-Farran to our roster," Impact head coach Frank Klopas said. "He is a player whose qualities will fit well within our group and style of play. We feel his experience with both the national team and abroad will benefit our team.”