Lewis, 19, has impressed Saddlers boss Dean Smith during his trial period and has been rewarded with a two-year deal.
The West Brom academy graduate goes straight into the squad for Saturday's season opener against Tranmere.
"He has impressed during his time with us so far," Smith told the club's official website. "He's an up-and-coming talent who we will be able to develop and fits the bill of what we are looking for in terms of attitude, temperament and attributes."
Lewis added: "This is a good move for me. It's nice to finally have things sorted and be at a well-run local club where I feel that I can really progress.
"The target is obviously to push Richard O'Donnell as much as I can and develop. It's a good opportunity for me to prove what I am capable of."