The 26-year old Colombian forward joined Sporting on loan in July 2013 but has now made the move permanently to the Estadio Jose Alvalade.
Lisbon had the option to buy Montero outright and have exercised that opportunity after he scored 13 goals in his first 16 Primeira Liga appearances with the club.
"Fredy has been and will always be a special member of our family," said Sounders FC Owner and General Manager Adrian Hanauer.
"Fredy had a wonderful career in Seattle and is continuing that success overseas. Hopefully his quality of play gives him an opportunity to be added to the Colombia World Cup roster. We wish him well with this next chapter of his career."
During his time with the Sounders, Montero scored 60 goals and provided 43 assists in more than 150 appearances in all competitions.
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