The 31-year-old has scored seven goals in five Europa League games this season, but has still been unable to usurp £26m signing Roberto Soldado from Spurs' Premier League team.
Queens Park Rangers and West Ham United were rumoured to be preparing January bids for the England forward, who is keen to play more regularly to enhance his hopes of making the 2014 World Cup squad.
However, The Mirror claims that Toronto FC, managed by Defoe's ex-Spurs teammate Ryan Nelsen, have already won the race for his signature with a lucrative offer that will see him end his career in Canada.
Defoe has apparently accepted the move to North America, which will be worth £6m to Tottenham, but is hoping that he can stay at White Hart Lane until the start of the MLS season in March.
According to the same source, Nelsen has managed to woo the former Portsmouth marksman by promising to fly his family out with him to help him settle in the Ontario capital.