The 21-year old defender, who arrived at Anfield from Rangers in 2010, spent four months on loan at Tynecastle last season and has now signed with the Jambos on a three-year contract.
Wilson will head to Edinburgh when his Liverpool contract expires this summer and he is excited about the opportunity.
"It didn't take me long to decide about committing myself to Hearts once the club made it known they were keen to keep me," he told the club's official website.
"I just want to play football and I firmly believe that staying at Tynecastle will benefit my career.
"I really enjoyed my time on loan here and am very pleased the move has been made permanent. This is a great club with great supporters and I'm looking forward to helping bring more success to Hearts.
"I believe the club has a bright future with a lot of good young players and being part of that excites me."