The 28-year-old Guatemalan midfielder departs CenturyLink Field for Dick's Sporting Goods Park with the Sounders landing general allocation money for their loss.
"It's tough to let a good, creative, technical player like Marco go, but we felt compelled to complete this agreement in order to create the resources to build our team for the long-term," Sounders FC general manager and president of soccer Garth Lagerwey said in a statement.
"We wish him all the best in Colorado and thank him for all the big moments he contributed to in Seattle over the past two years."
Of the Guatemala international, Rapids VP of soccer operations and technical director Paul Bravo added: “We are delighted to acquire a player of the caliber of Marco.
“It is no secret we need to increase our attacking output. We are confident Marco will add a creative element to our attack which will benefit everyone on the field."
#Sounders trade midfielder Marco Pappa to @ColoradoRapids: https://t.co/sJ3sq7It1Bpic.twitter.com/20GeAVVeEh
— Seattle Sounders FC (@SoundersFC) December 15, 2015