A source says the MLS club has sent the 25-year-old forward to Brazilian club Vasco da Gama on a year-long loan with an option to buy at the end of the loan.
Toronto was looking to unload Gilberto because of a glut of designated players. MLS rules allow for three and Toronto had four with Michael Bradley, Jozy Altidore, Sebastian Giovinco and Gilberto.
Toronto was facing a March 1 roster compliance deadline.
A club spokesman declined to confirm the loan deal, sayings there was no official update on Gilberto's status.
The Brazilian has been the odd man out since Toronto acquired Altidore and Giovinco and made Bradley captain.
Gilberto has been working out in Brazil, but had really been in limbo while the rest of Toronto FC was in training camp.
The five-foot-10 160-pound Brazilian was signed with much hoopla in December 2013 but had limited success in North America.
He had seven goals in 28 games (21 starts) last season with Toronto.
Nursing injuries and not in the best shape when he arrived, Gilberto started slowly. He also had to play second fiddle to Jermain Defoe when the English striker was healthy, but began to show his skills as the season wore on despite changes in strike partners and managers.
At times, he made chances but failed to finish them. He managed 73 shots, with a 9.6 per cent success rate, compared to 24.8 per cent for league leading scorer Bradley Wright-Phillips of the New York Red Bulls (27 goals on 109 shots).
Gilberto, whose English was limited, never complained about his lot. He usually greeted the media with a smile and "good morning," no matter what time of the day it was.
Gilberto was the first of three designated players to arrive before the 2014 season.
GM Tim Bezbatchenko called the Brazilian a "young rising star of the game."
"A great coup for the club," said then-manager Ryan Nelsen.
Bezbatchenko said Gilberto turned down deals in Mexico, Germany and other countries to choose Toronto and MLS.
Loaned out by Internacional, Gilberto Oliveira Souza Junior scored 14 goals in 28 games in Brazil's top division before joining Toronto. In four seasons in the Brazilian Serie A, he has made 109 appearances, with 38 goals and 10 assists.
Toronto was forced to make a similar loan move with Matias Laba prior to the 2014 season due to another DP glut. The Argentine midfielder was loaned to Vancouver where he flourished. The Whitecaps completed the transaction in December by buying Laba.
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