The deal includes $1.1 million in General Allocation Money with an additional $400,000 in GAM if certain performance metrics are met. The Rapids would also receive a percentage of a future transfer fee if Acosta is moved outside of MLS or within the league.
Acosta is coming off a resurgent 2021 season in which he helped lead the Rapids to the top seed in the Western Conference playoffs and played a major role for the United States in three international competitions.
"Kellyn is a player that has all the attributes necessary to play how we want in the midfield," LAFC Co-President and General Manager John Thorrington said. "He provides versatility and ability to help our team immediately. He is in his prime, a fixture in our National Team, and offers the MLS experience we sought in the off-season."
Shortly before the deal was announced, Acosta took to Twitter to state that the Rapids pushed him out of the organisation, and executed the trade with LAFC despite ongoing interest from European clubs. He later wrote that: "Regardless of the matter, I enjoyed my time in [Coloardo] and was with a great group of players and staff. We achieved things most wouldn't believe. Wishing them the best moving forward. I'm excited for my next adventure!"
This is the second major move between LAFC and Colorado involving an international midfielder since last summer, when LAFC sent Canadian midfielder Mark-Anthony Kaye to Colorado for roughly $1m in GAM and a 2022 international roster spot. The Rapids also received LAFC's first-round pick in the 2022 SuperDraft, which they traded.
A separate source confirmed to ESPN that Colorado is also in active discussions about sending Cole Bassett to Dutch side Feyenoord. It has been reported in the Netherlands that it could be an 18-month loan.
Former LA Galaxy general manager Dennis te Kloese left the club in November to become the CEO of Feyenoord.
Acosta, 26, appeared in 67 regular season games for Colorado after being acquired via a trade with FC Dallas during the 2018 season. He played mostly as a No. 8 for the Rapids but his versatility allowed him to play in various roles within the midfield and at left back, when needed.
With the USMNT, Acosta has appeared in seven of the eight World Cup qualifying matches and was the only player to start against Mexico in the CONCACAF Nations League and Gold Cup finals.
Bassett, 20, is a product of the Rapids academy and received his first USMNT cap in December, when he scored a late winner against Bosnia and Herzegovina.