Chelsea have confirmed that Wallace has left the club on a season-long loan deal.
The 21-year-old has joined Italian side Carpi, who were promoted to Serie A last term.
The Brazilian youth international agreed a move to Chelsea from Fluminense in 2013, but he is yet to make a senior appearance for the West Londoners.
Instead, the defender has spent time on loan with Inter Milan and Vitesse Arnhem.