The 23-year-old returns to the club he left in 2010, penning a three-year deal, while Mark Warburton is also reunited with his former Watford centre-back Rob Kiernan
Wilson, who has signed a three-year deal, triggered a clause in his contract allowing him to be released a year early from the Tynecastle Stadium, paving the way for a free transfer to the club he left for Liverpool in 2010.
"I wasn’t really sure what I was going to do when I was leaving Hearts so when I got the call I was interested straight away, having been here before," Wilson told the club's official website.
"I think if I look at myself now compared to as an 18-year-old I’m a much better professional and I have a lot more experience of just life in general."
The defender enjoyed a stellar season with Hearts, winning the 2014-15 Scottish Championship to guide the club back back to the Scottish Premiership at the first time of asking.
Kiernan, meanwhile, has penned a two-year deal to be reunited with his former Watford manager Mark Warburton at the Ibrox Stadium.
"I'm over the moon to be honest. I'm so glad it's been done now and I can concentrate on going forward," he added.

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