The MLS club posted messages on their website and Twitter warning fans to expect "a bloody big deal" on Monday.
British newspaper the Guardian and Canada's Toronto Star said the 31-year-old Defoe would be loaned back to Tottenham until March 1 before the start of the MLS season on March 15.
Defoe, whose former Tottenham team mate Ryan Nelsen is head coach at Toronto, has made few Premier League starts this season, despite the north London club's goal-scoring problems.
All Defoe's nine goals have come in cup competitions, seven in the Europa League.
Defoe, who has played 55 times for England and scored 19 international goals, is in his second spell at Spurs after rejoining the club from Portsmouth in 2009.
(Reporting by Toby Davis; editing by Ed Osmond)
