The terms of the deal weren't revealed.
Colon was expected to begin the upcoming independent-league season with the Monarchs after spending 2020 with the Cincinnati Reds.
"We as an organization are extremely happy that Christian Colon is getting this opportunity with the Toronto Blue Jays," Monarchs manager Joe Calfapietra said in a statement. "We are very excited for the possibilities of Christian playing again in Kansas City but even more excited that he is getting this chance. We all wish him the very best."
Colon owns a .249/.312/.310 (69 OPS+) slash line in 161 big-league games. The Kansas City Royals selected him fourth overall in the 2010 draft.
The 31-year-old is a versatile defender, having appeared at second and third base, as well as shortstop, throughout his career.