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The defender joins the Ligue 1 outfit having spent the previous season on loan at Palmeiras.
Matheus, 24, has made 78 Serie A appearances and enjoyed spells at the likes of Bahia, Vasco de Gama and Goias.
A statement on Toulouse's official website read: "Toulouse Football Club is delighted to welcome Brazilian defender William Matheus Da Silva by the announcement of the formalisation of his coming under the violet colours until June 2018.
"He has signed a four-year contract with the club Toulouse after satisfying the traditional medical rigour.
"Welcome to William Matheus from all Toulouse FC and its supporters, wishing him every success on the banks of the Garonne!"
