Insider journalist Elliotte Friedman of Sportsnet first broke the news, which was confirmed on Toronto's website later Tuesday night.
Alfredsson has been an assistant coach for the Ottawa Senators for the past three seasons, but is now choosing the "forbidden" move to Toronto.
The matches between Toronto and Ottawa are known as the Battle of Ontario, where Sundin and Alfredsson were often pitted against each other as team captains.
Sundin and Alfredsson were both there when Tre Kronor won the Olympic gold medal in Turin in 2006. Alfredsson played 17 seasons for Ottawa, where his jersey was retired.
