Sylvia rejected an offer from the Demons to join the Dockers, who lost to Hawthorn in last Saturday's premiership decider.
There is no doubting the 27-year-old's ability, but he has regularly frustrated Melbourne fans in his 157 games.
"This footy club has played a big part in my life," Sylvia said in a Melbourne statement.
"This is the hardest decision I've made in my footy career to leave a club after 10 years.
"Melbourne will always be in my heart - it has made me who I am today and I thank them for that."
Clearly, the lure of a potential premiership was a key factor in Sylvia's decision to head west.
Paul Roos said the day he was confirmed as Melbourne coach that he wanted to retain Sylvia and Jack Watts, who will stay with the Demons.
But Melbourne are several years away from becoming contenders, while the Dockers have just entered their premiership window under coach Ross Lyon.
"I will always consider myself a Melbourne person," Sylvia said.
"I leave on good terms and clearly this was a tough decision, given the positive moves the club have made in recent times.
"But Fremantle are a good fit for me, based on where I'm at with my football career."
The Dockers said they would lodge the paperwork for Sylvia when the free agency period starts on Friday morning.
Melbourne said Sylvia's decision would give them more flexibility with free agency and trades.
While his departure hurts their already-thin midfield depth, the Demons are confident they will be able to land some big names.
"We offered Colin a contract, which we've been informed is of similar terms to the Fremantle contract, but as an unrestricted free agent, he had a choice to make," said Demons football operations manager Josh Mahoney.
"This decision does create a lot of opportunities for us going into the trade and free agency periods.
"As we have already stated, we are aiming to bolster our midfield depth with experienced midfielders and Colin's decision today allows us to create more flexibility with potential targets.
"We thought Colin could have played a role for us under Paul Roos.
"However as a club, this is a period of significant change - we understand his decision and we will move on quickly."