Santos had previously announced the agreement with the Major League Soccer side on Saturday.
Soteldo's contract with Toronto runs through 2025.
"I am very excited to come to Toronto FC. It is one of the most important sports organizations in Canada and the United States," said Soteldo. "It is an MLS Cup champion, has great players, and most importantly, they are always competing to win. They have amazing fans and facilities."
Soteldo, 23, made 104 appearances for Santos, scoring 20 goals and adding 17 assists since joining the club in January 2019. Soteldo adorned the historic No. 10 shirt, worn by Brazil legend Pele, during his time with O Peixe.
"We are very excited for Yeferson to join our club. He is a dynamic, exciting, fearless player who will immediately improve our already strong roster," said Toronto FC president Bill Manning. "He checks the boxes of what we were looking for in a DP, an attacking player who adds a different dimension to our side, and I think our fans will be excited to see him in a TFC uniform."
Soteldo also has one goal and three assists in 19 appearances with the Venezuela national team.
Before joining Santos, Soteldo played for Zamora in Venezuela's top flight and with Huachipato in Chile's Primera Division.