Bayo signed for Celtic in January 2019 from Slovakian side Dunajska Streda, where he had spent just one season.
The Ivory Coast international struggled to cement his place at Parkhead and had been being linked with a move away from the club.
Toulouse have agreed a deal with Celtic for the 23-year old, with the Ivorian undergoing a medical at the Ligue 2 side, according to French daily La Depeche du Midi.
Bayo will be hoping to reprise his form from his Dunajska Streda days, where he found the net on a frequent basis.
The striker was not involved in games for the Celts for the better part of the season, making just eight Scottish Premiership appearances for Neil Lennon’s side.
Scottish side St.Mirren were also keen on landing Bayo, but have been beaten to his signature by Toulouse.
Celtic boss Lennon has confirmed that Bayo is to join the French side on a season-long loan deal.
