The 19-year-old playmaker, who has signed a big-money "young designated player" deal, is seen as the club's replacement for Kaka after the Brazilian legend retired this past offseason.
"We are pleased to welcome such an exciting young prospect to our roster," Orlando general manager Niki Budalic said in a news release. "Josue has great pace and can create chances for himself and others. His skill set and profile give us confidence he will be a great fit in Orlando and MLS for years to come."
Colman joins Orlando from Paraguayan side Cerro Porteno, having made 28 starts in 2017 while helping his side claim the Torneo Clausura title. He has made 16 appearances for Paraguay's Under-17 and U-20 sides, representing his country at the 2015 U-20 World Cup.
The attacking midfielder will help fill the void left by Kaka, who recorded 24 goals and 22 assists over 75 matches in three seasons with Orlando.