The Bournemouth midfielder had been expected to remain at Vitality Stadium after Eddie Howe stated he was a key part of his plans.
The 29-year old will return to France, where he played for four years with Saint Etienne before joining the Cherries in 2015.
His time on the south-coast was underwhelming, with injuries and an Africa Cup of Nations appearance, curtailing his productivity.
In his two seasons with Bournemouth, Gradel scored two goals in 27 appearances across all competitions.
CONFIRMED: @maxigr04del joins Toulouse on loan until the end of the season.
Good luck Max. #afcbhttps://t.co/rXRvY8XVOx
— AFC Bournemouth (@afcbournemouth) August 16, 2017