Altidore cost Sunderland a pricey sum of £7m 18 months ago but has failed to live up to the red hot form displayed in Holland – netting just 3 goals in 50 games for the Black Cats as opposed to 51 in 93 for previous club AZ Alkmaar.
The American international pulled out of the squad to face Liverpool last weekend having fell ill, although his omission followed a week of intense speculation over his future.
Toronto are understood to be amongst the front runners from the MLS to sign the 25-year-old but need to offload Defoe in order to fund any move.
The English striker is said to be desperate to return to the Premier League after just 12 months in Toronto and is back training with former club Tottenham during the MLS off season.
It is thought a swap deal for the pair could be on the cards – with the only potential stumbling block for the Black Cats being the potential wage demands from 32-year-old Defoe.
Hull boss Steve Bruce has already confirmed his interest in signing the England international too and Gus Poyet will have to make a decision soon or face losing out on the striker.
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