Crystal Palace announced they had parted company with Freedman in order for him to replace Owen Coyle in the Reebok Stadium hotseat.
Freedman: "I am delighted to join Bolton.
"The club is geared up to getting back into the Premier League. There is an impressive set-up and structure in place, and a first team squad of undoubted quality.
"I am excited about the challenge ahead of us."
Former Palace striker Freedman took charge at Selhurst Park following George Burley's departure in January last year and led the club to the semi-finals of the League Cup last season.