There was a suggestion Mills could join initially on a season-long loan, but the centre-half has signed a three-year deal after the clubs agreed an undisclosed fee.
He is Wanderers' second close-season signing following the arrival of free agent Keith Andrews.
Bolton manager Owen Coyle said: "Matt is a player who has a high level of experience in the Championship.
"We are delighted to have made this acquisition as he adds strength and quality into the mix.
"He is 25 years old and has already captained teams at this level, so we know what he will bring to the squad, both on and off the pitch."