The midfielder has signed a three-year-deal with the Lions after helping them gain promotion to the Sky Bet Championship while on loan from Wolves during the 2016/17 season.
Wallace arrived at Wolves from Portsmouth in May 2015 and went on to make 24 appearances for the club in all competitions.
During his time at Wolves the 23-year-old enjoyed two loan spells with Millwall; in the 2015/16 season from January to March and then again in the 2016/17 season from January through until the end of a campaign that ended in play-off success.
Everyone at Wolves would like to thank Jed for his efforts while at the club and wish him the very best of luck for the future.