Wang signed with the Yankees on March 23, and the 33-year-old right-hander was 4-4 with a 2.33 ERA in nine starts for Triple-A Scranton-Wilkes Barre. New York released him Friday.
He originally signed with the Yankees in 2000 and went 55-26 in five seasons. Wang has been slowed by injuries since then, starting when he injured his foot in 2008.
Wang was 2-6 with a 6.68 ERA in 10 games last year in his third season with Washington.
Agent Al Nero said the agreement with Toronto was in the process of being finalized. The Blue Jays' 4.56 ERA is 28th in the major leagues.
When asked about Wang before Toronto's home game against the Texas Rangers, Blue Jays manager John Gibbons said he didn't "know anything about that."
— With files from The Canadian Press