In exchange, the Leafs sent the Bruins a first- and second-round pick in the 2010 draft, plus a first-round pick in the 2011 draft. The 21-year-old Kessel, a restricted free agent, signed a five-year, $27 million deal with the Leafs.
"Bringing Phil Kessel aboard, it's a statement to our players that we intend to be competitive right away, and I think he gives us a dimension that we need," Maple Leafs general manager Brian Burke said.
"[Kessel] told me he's walking on air. This is a free agent that could have signed with other teams, he wanted to sign with us, and I think it's an important pick up for us."
The Bruins picked Kessel fifth overall in the 2006 draft. Kessel scored 36 goals and added 24 assists in 70 games with Boston last season, but he had shoulder surgery during the summer and won't be ready to play until November at the earliest.
The trade represents a possible change in strategy for Burke. Up until now, he's been content to stock up on draft picks and defensemen, but has done little to bolster the Leafs' offense.
Kessel gives the Leafs a powerful offensive threat, though giving up three high draft picks appears to be quite costly. But the Leafs also have several promising rookies in Tyler Bozak, Viktor Stalberg, Nazem Kadri and Christian Hanson, all of whom have scored in the team's first two preseason games.
"It's a very high price but it's one we feel makes sense for us and I think what's made it possible to expend those picks is two focuses: One is that he's a young player, he's not even 22 yet," Burke said.
The Leafs and Bruins talked about a Kessel deal in June, on the eve of the NHL entry draft in Montreal. But the trade, which featured Toronto defenseman Tomas Kaberle going to Boston, fell apart over a miscommunication, when each team believed it was getting a first-round pick in addition.
The Bruins were no longer interested in Kaberle after signing Derek Morris in July.
But Burke, with his team in desperate need of offense at forward, renewed his interest in Kessel late in the summer.
Boston tried to re-sign Kessel, but a contract offer believed to be in the ballpark of the four-year, $16 million deal Jordan Staal signed with Pittsburgh was apparently rejected in July.
One source told ESPN.com that the Kessel camp asked for a trade at that point. Kessel's agent, Wade Arnott, vehemently denies that.
One fact neither camp disputes is Kessel and Bruins coach Claude Julien didn't see eye to eye, contributing to the player's exit. Julien stresses a defense-first system.
"It's taken a long time, it's taken a lot of effort, but I think it's worth it," Burke said.
Information from ESPN.com's Pierre LeBrun and The Associated Press was used in this report.