The American striker has agreed to terms on a new contract that will see him remain with the Reds through the 2022 season, reports Kristian Jack of TSN.
Altidore, who's in the latter stages of recovering from an ankle injury, is in the final year of his Designated Player deal with the Canadian club.
A vital contributor since moving to BMO Field in 2015, the 29-year-old has made his desire to remain with the club clear, particularly after the departures of fellow big-name attackers Sebastian Giovinco and Victor Vazquez.
"I want to stay in Toronto. For me and my family, Toronto is home, Toronto is everything," Altidore said earlier this month.
"I get that there is a business side and I've cooperated on that end as well," he added. "But I can't do any more than say I want to be here and try to do all the right things.
"But I hope in the end that I'm a Toronto player for the rest of my career."
The U.S. international has scored 45 regular-season goals in his four seasons with TFC, adding seven tallies in the postseason, including the eventual winner in the 2017 MLS Cup final.