On 1 July 2011, Varlamov was traded to the Colorado Avalanche for a first-round draft pick in the 2012 NHL Entry Draft and a second-round pick in either 2012 or 2013. As a restricted free agent at the time of his trade, he was then signed to a three-year, $8.5 million contract with the Avalanche the following day, marking his projection as the Avalanche's starting goaltender.