The 20-year old Ecuadorian winger joined TFC on loan from LDU Quito in 2011 before signing permanently in January last year but will now continue his career with RSL after making a total of 52 appearances for the Canadian club.
"While Plata is a player our fans enjoyed watching, he did not figure in our plans moving forward," Toronto president and general manager Kevin Payne said in a statement.
"It made sense for our club to move him for value as we can continue to build the team we want."
RSL general manager Garth Lagerwey added: "We are happy to add a fast, young forward with MLS experience.
"We believe that Joao can become an impactful member of our team as we continue to work to restock our forward group."