The Colombia playmaker, who did not make his nation's squad for the Copa America because of concerns over his fitness after missing the end of Everton's 2020-2021 campaign, had not featured in a competitive game for the Toffees so far this season.
Rafael Benitez reportedly did not see the 30-year-old as a key player in his squad and confirmed earlier this month that Everton had been open to offers for the former Real Madrid man, who won the Golden Boot at the 2014 FIFA World Cup.
Signed on a free transfer from Madrid by previous manager Carlo Ancelotti, James made 26 appearances in all competitions for Everton last season, scoring six goals and creating a further eight.
However, with the Qatari transfer window still open, Al-Rayyan – coached by former Paris Saint-Germain and France boss Laurent Blanc – has now signed the Colombian star.
Blanc took over Al-Rayyan in December 2020 and guided it to a third-placed finish in the Qatar Stars League, behind Al-Duhail and Al-Sadd, coached by Barcelona legend Xavi.
James' signing represents a coup for the league ahead of the Qatar 2022 FIFA World Cup, though he will still have to fight his way back into Reinaldo Rueda's Colombia squad.
Though injuries did limit his game time, James was a creative fulcrum for Everton under Ancelotti, forging 54 chances, placing him second in the squad behind Gylfi Sigurdsson (60), who made 18 more appearances.
James led the way for Everton with chances created from open play (38) and when it came to crafting big chances (14) – defined by Opta as situations where players should reasonably be expected to score.
Per 90 minutes played, James created 0.56 big chances in the Premier League, putting him just below Jack Grealish and Bruno Fernandes (0.58), ranking sixth in the competition among those who played 20 or more matches.
Everton went unbeaten in its first five games under Benitez but lost 3-0 to Aston Villa last weekend before heading out of the Carabao Cup with an 8-7 penalty shootout defeat to Queens Park Rangers on Wednesday (AEST), after a 2-2 draw at Loftus Road.
"To be fair, I don't have too much information," Benitez said when asked about James after the Carabao Cup exit. "I know he is already there [in Qatar].
"Don't forget, we are talking about a special situation from this club, the financial fair play rules have to manage everything in the best way we can."
Everton has been operating under tight financial constraints this season, with four of the five arrivals under Benitez coming on free transfers, while Demarai Gray cost a reported £1.7 million ($3.2 million) from Bayer Leverkusen.