Dermott was the Maple Leafs' final restricted free agent who's expected to crack the NHL roster. Joey Anderson is on the team's reserve list.
His signing puts Toronto more than $1 million over the salary cap, according to CapFriendly.
The 23-year-old collected 11 points across 56 games while averaging 17:19 in ice time during the 2019-20 campaign.
Dermott has spent all three of his NHL seasons with the Maple Leafs, who drafted him 34th overall in 2015.