In return, the Leafs get first-round and third-round draft picks in 2011.
Versteeg was sixth on the team in scoring with has 35 points (14 goals, 21 assists) in 53 games this season.
He came to Toronto in the offseason after winning a Stanley Cup with the Chicago Blackhawks last spring.
The Flyers got a glimpse of his potential during last year's Stanley Cup final and are happy to add him to their deep lineup.
"Kris is an exciting young forward," Flyers GM Paul Holmgren said in a release. "He'll fit in with our group of players here.
He's a quality forward that can play in a lot of different roles for our hockey team. He can move up and down our lineup, he can kill penalties, he can play on the power play.
"We think he's a guy that over the last few years, particularly in Chicago, has really blossomed into a good forward and we think he's going to be a really good addition to our team."
Versteeg is set to earn $3.083 million next season in the final year of his contract.
The 24-year-old Alberta native has 136 points in 223 games. The deal is the second in less than a week for the Maple Leafs. Last week, Toronto traded Francois Beauchemin to the Anaheim Ducks for forward Joffrey Lupul.