Boss Wilson said a "nominal fee" had been agreed, which is reported to be £75,000. Collins signs a 2½-year contract with the League One club.
The 30-year-old originally joined City from Port Vale in November 2005, joining on loan as a technicality before the move could be made permanent for £65,000 in the following transfer window. He impressed with some solid performances, playing 26 times before suffering injury in September 2006. He has only made one further appearance, in the FA Cup earlier this month, and played four times on loan for Swindon earlier in the season.
Curtis Aspden has also left the club. The goalkeeper joined Blue Square Premier League side Farsley Celtic earlier in the month, and now makes that move permanent for a nominal fee. He joined City as a junior following spells with Burnley and Bolton Wanderers and made it onto the bench after signing pro terms, but didn't get into the side.
Stuart Elliott is expected to join Doncaster Rovers for a rumoured £100,000, having previously rejected talks with Southend, Gillingham and Darlington.
David Livermore and Michael Bridges had also been rumoured to be on their way out but nothing has materialised yet. There is also no news on any signings, with Walton and goalkeeper Mark Tyler - who is fit again after recovering from a back injury sustained on the Dubai trip - Brown's only signings so far this month.