The 38-year-old - who was last seen as Walford's tart with a heart Kat Slater on Christmas Day 2005 - recently inked a new deal at the same time as co-star Shane Richie.
On Sunday, show bosses announced that Richie is to make a comeback as loveable rogue Alfie Moon. The news led to immediate speculation that his screen wife Wallace will also return as Kat Slater.
Of her decision to come back, Wallace said: "I've really enjoyed playing different roles over the last few years but am excited to slip back into Kat Slater's stilettos. I've missed her."
Richie commented: "More than anything I'm looking forward to getting my face covered in Kat's lipstick again!"
A Walford source told DS: "Alfie's return wouldn't be the same - or make sense - without Kat. They're a match made in heaven."
Richie and Wallace are due to return to filming later this year and will make their screen reappearance in the autumn.
Last October, Wallace claimed that she missed playing Kat, but insisted that she had "no immediate plans" to return to the BBC's flagship serial.