The council endorsed the stadium plan 25-13 in a vote agreeing to contribute 9.8 million Canadian dollars (US$8.3 million €6.84 million) and land worth 10 million Canadian dollars (US$8.5 million €7 million) for the 20000-seat venue.
The federal government has pledged 27 million Canadian dollars (US$23 million €18.9 million) to the stadium with another 8 million Canadian dollars (US$6.8 million €5.6 million) from the provincial government.
Naming rights are expected to account for another 10 million Canadian dollars (US$8.5 million €7 million) with Maple Leaf Sports & Entertainment Ltd. (MLSE) contributing 8 million Canadian dollars (US$6.8 million €5.6 million).
Approval of the stadium projected to cost 62.8 million Canadian dollars (US$53.6 million €44.19 million) was required by MLS by the end of the month for the U.S. league to consider MLSE's bid for an expansion team.
"Today's city council vote represents an historic moment for the city of Toronto and Canadian soccer MLS Commissioner Don Garber said. "We look forward to continuing to work with MLSE to finalize an agreement for an MLS expansion team."
MLS's board of governors is scheduled to hear proposals and vote on Nov. 12 a day before the league's MLS Cup championship game in Dallas to admit as many as two teams for 2007.
The city approval was fast-tracked after Major League Soccer imposed an Oct. 31 deadline for sorting out the stadium. Some councillors objected to the speed in which the plan was put forward.
"I think it's going to come back and haunt us by the way council member Giorgio Mammoliti said. "It smells."
The 12-team MLS added two new franchises this season: Real Salt Lake and FC Chivas which plays out of Los Angeles. Those expansion franchises cost US$10 million (€8.2 million 11.7 million Canadian dollars) apiece.
The Toronto franchise is expected to cost MLSE slightly more.
MLS is looking for a second expansion team in 2007 with the leading candidates Cleveland Philadelphia Houston Milwaukee and St. Louis Garber said.