The 27-year old Swiss gloveman is TFC's all-time appearances leader but has been sent to the Sounders as they seek an extra selection in the future draft.
Sounders head coach Sigi Schmid was thrilled to bring in a player such as Frei after declining the option on Michael Gspurning.
"Stefan is a goalkeeper we have liked for a number of years," Schmid said in a statement.
"He is a quality professional who brings experience and leadership to the position. Adding Stefan at this point of his career was very attractive to us."
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