A local talent who made a name for himself in one of the top leagues in Europe, he was counted on to be a catalyst for turning the young Major League Soccer club into a playoff contender.
Those plans came to an official end on Friday as de Guzman was traded to FC Dallas, capping an inconsistent tenure for his hometown club.
TFC received forward Andrew Wiedeman in return.
"Sometimes you have to do some things for the football club that make the football club better," Toronto FC's head coach and director of soccer operations Paul Mariner said on a conference call Friday. "I feel the fans sometimes are questioning the things that we're doing but this really helps us to improve the defensive situation."
The move frees up a designated player spot and significant salary-cap space. De Guzman was in the final year of a rich contract that paid him US$1.9 million this season.
Mariner said the team is in talks with a few players who could fill the available DP spot and plug some gaps on the team's ailing back line.
"This creates significant flexibility for the team moving forward," Mariner said. "We've been saying for quite some time that we need to strengthen the defensive line and this gives us the ability to do so."
The 31-year-old de Guzman originally signed with Toronto FC as the club's first designated player in September 2009. He showed flashes of skill in Toronto, but had trouble living up to his DP status and big contract. He had two goals and eight assists in 65 league appearances for Toronto.
''I know it's been tough for him over there," said Patrice Bernier, a central midfielder for the Montreal Impact and de Guzman's teammate on the Canadian national team. "From the get-go when he arrived there's been a label. They expected a lot from him.
"Personally I think they didn't really help him out to make sure he was the key element in the structure around him. It was tough for him.
"Now he's moving on. I hope for him that at least he'll be able to enjoy his football and not live with all the stress that he had in Toronto, and Toronto can move on also, not having the label of a Canadian player that's a DP and they expected something out of it."
Mariner said the decision to part with de Guzman came about "very recently." A possible factor in De Guzman's departure is the excellent recent form of midfielders Torsten Frings and Terry Dunfield.
De Guzman found himself on the outside looking in as Mariner went to a 4-4-2 system that revolved around Frings and Dunfield in central midfield, with more offensive players on the flank.
"Terry Dunfield and Torsten Frings have done everything to a T to what I've been asking of them," Mariner said. "It's been a little difficult for Julian to get into that (central midfield) spot."
Prior to joining Toronto, de Guzman spent time with Hannover 96 of the German Bundesliga and Deportivo La Coruna of the Spanish La Liga. He was the first Canadian to play in La Liga, one of the world's premier leagues.
He thrived with Deportivo, anchoring the Spanish club's midfield in the 2007-08 season, when he was named the club's player of the year.
He has also earned 56 caps for the Canadian men's national team.
De Guzman said earlier this week he had hoped to work out a deal to stay in Toronto before his contract expired in December.
"We're in the early stages of talking about it right now," he said Tuesday when asked about his contract status. "Trying to figure out what the best possibility is. It's going to take some time. Hopefully I'd like to know, I guess both parties like to know what's going to happen. But I believe we just started talking, so we'll see what happens."
Asked about his preference, he said: "I'm happy here, it would be great for me to continue my career here. We'll just have to wait and see how both sides feel about it."
FC Dallas head coach Schellas Hyndman said de Guzman is a good fit for his team's system.
"He will give FC Dallas an additional veteran that can solidify our possession style of play," he said in a statement. "He also has a bit of toughness to him that will help us win 50-50 balls and control the central midfield."
De Guzman was travelling with the team on Friday, but Hyndman said he wasn't sure if the paperwork would be ready in time to include him in the lineup for Dallas's game in Colorado on Saturday night.
Wiedeman, 22, has made eight MLS appearances. He was selected 21st overall in the 2010 SuperDraft.
He came up to the MLS through the Generation Adidas program, which encourages early entry of American players into the league. As such, he doesn't count against the salary cap.
"He's an intriguing player," Mariner said. "He's young. He's very, very hungry. He's one of the best finishers I've seen in the modern era. I'm looking for him to really take the bull by the horns and take this opportunity."