After 10 seasons for Everton at Goodison park, the 37 year old goal keeper has agreed a three-and-a-half-year deal with the MLS side.
Howard has insisted "I will remain an Evertonian for life. This will always be my team, my club."
Paul Bravo, Colorado's technical director and VP of soccer operations, believes the US international will prove a "pivotal signing".
"Tim is exceptional, both as a player and a person.
"He proved it at the last World Cup for the US national team and he has been proving it for the last decade in the English Premier League.
"He has experience at the very pinnacle of the sport and we feel he has much still to offer on the pitch."