The 37-year-old has agreed a pre-contract agreement with the Major League Soccer side and he will join the Rapids once their transfer window opens in July.
Howard is contracted at Goodison Park until 2018, but it is understood that Everton will pocket a small transfer fee, likely to be less than £1million, as part of the deal.
Howard will leave a great legacy at Everton
Howard initially joined the Blues on loan from Manchester United in 2006, but such was his impact the club made the move permanent in February 2007. Howard has made 412 appearances for the club in all competitions and kept 132 clean sheets in total. He also became the fourth goalkeeper in Premier League history to score a goal in January 2012 after he scored from inside his own area, albeit wind assisted, against Bolton Wanderers at Goodison Park.
He has been the Toffees' first-choice goalkeeper since joining, but a knee injury and loss of form led to Spaniard Joel Robles replacing Howard as Roberto Martinez's first-choice at the end of January.
Having lost his place in the starting line-up, the end of his Goodison career has been mooted over the past few months, but news of Howard's imminent departure will be met with sadness as well as resignation that it is the best move for all parties.
The former Manchester United goalkeeper still harbours hopes of playing for the United States at the 2018 FIFA World Cup in Qatar and knows a move to Colorado will guarantee him first-team football. Howard will assume an informal ambassadorial role when he embarks on the next chapter in his career and said he will be "an Evertonian for life".
Martinez and Kenwright pay tribute to a great club servant
Roberto Martinez said it has been a pleasure to work with Howard and identified his "incredible character" and "influence on young players" as defining features of his decade at Goodison Park.
The Everton boss added that Howard's contribution has been "vital" both on and off the field. The Spaniard went on to praise the goalkeeper's "loyalty" and "consistency" and said that he will "always be remembered" and "the figures will be given a bigger respect once he is gone and we all look back at his achievements".
Chairman Bill Kenwright also paid tribute to Howard describing him as a "perfect Blue". Kenwright highlighted not only the 37-year-old's "great talent" but also his "great loyalty" and "integrity".