This beautiful phrase literally means "blue like the color of the sea" and is the title of this iconic song by Tim Maia.
More than just a color, it represents a feeling of ultimate peace and hope. Tim Maia sings about having "um sonho todo azul, azul da cor do mar" (a dream all blue, blue like the color of the sea) as the reason to live, even when life is hard. It's a perfect example of the poetic, soulful imagery found in classic Brazilian music.
Tim Maia starts this track wishing everyone would just sit down and listen to him: "Se o mundo inteiro me pudesse ouvir / Tenho muito pra contar / Dizer que aprendi" ("If the whole world could hear me / I have so much to tell / Say what I've learned"). What did he figure out? Something pretty blunt and unfair about life. He drops the cold truth that "um nasce pra sofrer / Enquanto o outro ri" ("one is born to suffer / while the other laughs"). Notice how he uses "a gente" here—in everyday Brazilian Portuguese, it literally means "the people," but everyone uses it as an informal way to say "we."
Instead of staying bitter about that inequality, he turns the mood around completely. He insists that anyone going through hard times has to keep searching for "razão para viver" ("a reason to live") and find a purpose to dream. That leads straight into his big, beautiful visual: "Ter um sonho todo azul / Azul da cor do mar" ("To have a dream completely blue / Blue the color of the sea"). English speakers usually associate the word blue with sadness, but Tim flips that on its head. Here, blue is pure peace, vast and calming like open water.