He then returned to the Reebok Stadium to play Premiership football, but hasn't been able to force himself into Sam Allardyce's plans. The Birkenhead-born Irish Under-21 moved to Crewe on loan in search of first team action but was again frustrated, failing to make an appearance. He then switched to Second Division side Barnsley in November, where he has played 12 times. Despite not finding the net for them, manager Gudjon Thordarson decided to extend the loan until the end of the season.
However, his stay has been cut short after City offered Bolton an initial fee of £50,000 to take the player permanently. Terms have been agreed with Wanderers and Walters himself and the transfer is set to go through on Tuesday.
Peter Taylor said of the deal: "We're delighted to have him back. He was perfect for us last season and, because he is only 20, is only going to improve.
"I know people are going to have a go at us for spending a few more bob for a Third Division side, but nine times out of 10, the players we have brought in are under 21. Jon is another one who is very much one for the future."
The 5'10" forward, who has also played out wide, will compete with Ben Burgess, Danny Allsopp and Jamie Forrester for a starting place, and with the likes of Stuart Elliott, Jason Price, Ryan France and Clayton Donaldson also in the fold, City are now well covered for attackers.
This puts an end to speculation that has been ongoing for months that Taylor would add a forward to the squad. Grimsby's Michael Boulding was one of the latest names to be linked with a move to the KC Stadium, but he may infact replace Walters at Barnsley if he can be tempted away from Blundell Park.