The teams announced the trade Tuesday. The Blue Jays agreed to send cash to the Cubs to offset some of Phelps' remaining contract figures this season, which includes a $2.5 million base salary for the year, a $1 million club option for 2020 and multiple performance bonuses.
"Very aggressive sort," Cubs manager Joe Maddon said. "Very physical, aggressive, let's-go kind of guy. It's going to be wonderful to work with him [Wednesday]."
Phelps, 32, suffered a torn ulnar collateral ligament in his pitching elbow during a spring training game against the Los Angeles Angels in March 2018. He had surgery a few days later and didn't return to the major leagues until last month.
Phelps recorded a 3.63 ERA in 17 relief appearances with the Blue Jays. He was 0-for-2 in save opportunities with the club.
Chicago moved left-hander Xavier Cedeno to the 60-day injured list to create a spot on the 40-man roster. The Cubs also placed right-handed reliever Pedro Strop on the 10-day IL with left neck tightness and called up pitcher Duane Underwood from Triple-A Iowa.