The 21-year-old Henry remained with the MLS team on loan, playing 20 games including 18 starts. He could well start in the season finale Saturday in New England.
General manager Tim Bezbatchenko, who declined to identify the Cyprus club in question, said Henry may even return to Toronto on loan next season. He could also play for his new club or be sold on to another club, with Toronto having a say in where he might go.
Bezbatchenko called it a "win-win" for both the player and the club.
Asked why the club had not announced the sale-loan months ago, the Toronto GM cited a status quo.
"In our position, the player wasn't leaving. There was nothing changing about his budget. There was even a chance he was going to be here next year. We thought it would be more of a distraction than anything."
One would be hard-pressed to think of any other top-level league that might share that view while TFC fans may well argue they would like to know who owns the players wearing the team jersey.
Bezbatchenko, who said he was not in a position to release the transfer fee, insisted that the deal was welcomed by all parties. Henry was not available for comment after training.
Bezbatchenko said the sale-loan deal did not change Henry's hit on Toronto's salary cap. But separate negotiations with the Cyprus club lumped together a transfer fee and loan fee so money changed hands. Toronto also got allocation money back in the spring for selling the player.
Henry's salary this season is listed at US$87,083.33 by the MLS Players Union, although it may well be higher via the use of allocation money. The league is paying his salary, Bezbatchenko said.
There is a contract option that needs to be exercised next year for Henry, with Bezbatchenko saying discussions are planned with the player starting next week to see if all parties want him back in MLS in 2015.
The transaction became public Thursday after coach Greg Vanney was asked about rumours concerning Henry. He only had an incomplete answer.
Henry has made no secret that playing in Europe is a career goal. Former manager Ryan Nelsen sent Henry to England's West Ham United for a training stint after the 2013 season with Toronto.
"For me, when a player wants to try to pursue things overseas, we want to be supportive," said Vanney, who played in France as well as MLS. "At the same time, we wanted him here. It's an arrangement where he is a Toronto FC player for as long as he and we agree on that."
Nelsen, a former Premier League defender, saw Henry as a raw talent destined to play in Europe and said West Ham had liked what they saw.
Bezbatchenko said they had thought the English side might make a bid to keep him, but an offer never came. Instead came the bid from Cyprus.
"We took the offer seriously," said Bezbatchenko, "We sat down with the player and his agent and decided together that this if we sold him, it would allow Doneil to fulfil that dream (of playing in Europe) but it was on the condition that we wanted to be able to keep the player for the remainder of the year and potentially 2015."
Henry, one of the club's longest-serving players despite his young age, has played 69 league games for Toronto since making his MLS debut in 2010. But he has had a roller-coaster season in 2014. He has one goal this season but has conceded several penalties.
Rookie Nick Hagglund has been the first-choice centre back alongside captain Steven Caldwell in recent weeks when available.
Henry, a native of Brampton, Ont., became the first player from Toronto FC Academy to graduate to the first team when he signed a pro contract in August 2010. Then 17, Henry had already made three non-league appearances for the club.
Follow @NeilMDavidson on Twitter