The deal is structured as an initial £23.9m with a further £1.7m in potential add-ons, and Methalie is expected to undergo a medical before signing a five-year contract.
Toulouse had previously turned down an offer worth around €33m (£28m) for the 20-year-old, with club president Olivier Cloarec insisting for weeks that Toulouse would not move from their valuation before the two sides ultimately settled closer to £25.6m.
Methalie made 28 appearances in Ligue 1 last season, scoring twice in his final three games as Toulouse finished ninth, and is regarded as one of the most promising young left-backs in French football, with a senior France call-up considered a matter of time given the age of current options Lucas Digne and Théo Hernandez.
He becomes Sunderland's long-term successor to Reinildo, who turns 33 during the coming season, with the club's other left-back options, Dennis Cirkin and Arthur Masuaku, both departing this summer.
The signing follows a prolonged chase for the defender by sporting director Florent Ghisolfi, and represents Sunderland's second addition of the summer after Thomas Meunier's free transfer arrival from Lille, with head coach Régis Le Bris keen to add depth before the club's Premier League opener at Ipswich Town next Saturday.
Sunderland will also compete in the Europa League this season, their first European campaign in 53 years, after a seventh-place finish last term, adding further importance to strengthening the squad's depth before the window closes.
Methalie's arrival addresses a position Sunderland had identified as a priority after Cirkin departed as a free agent and Masuaku's own exit closed in, following interest from Turkish side Konyaspor.
Predominantly used as a left wing-back at Toulouse, Methalie offers a more attack-minded profile than the experienced Reinildo, giving Regis Le Bris a genuine alternative in that position as Sunderland prepare for the increased physical demands of a season that will include European football for the first time in over five decades.