D-Ro won two MLS titles with San Jose and two with Houston in his eight-year MLS career. He earned $325,000 in 2008 and has two years remaining on his contract.
"I think he fits in perfect," TFC manager Mo Johnston told the Globe & Mail. "He can play in the middle. He can play up front, he can play out wide. He's a tremendous acquisition for us. I think he's a hell of a player and we're getting him at a very, very good time at age 30."
TFC failed to make make the MLS playoffs in 2007 and 2008 but has already sold out all its available season tickets (16,000) for 2009.
The deal gives the Dynamo about $500,000 to work with -- the difference between De Rosario's salary and James' $45,000 salary, plus the allocation money it acquired from TFC.
"It swings our salary cap in a huge, huge way," Dynamo chief operating officer Chris Canetti told the Houston Chronicle. "We now have incredible flexibility to do a lot of things."