Chelsea have loaned full-back Wallace to Brazilian side Gremio on an 18-month loan, the Blues announced on Thursday.
Wallace, 21, will play for Gremio until June 2017 after spending the first half of the season with Carpi in Serie A.
Chelsea signed Wallace from Fluminense in 2013 but he has yet to make an appearance for their senior side.
After he was unable to obtain a UK work permit, Wallace has also played on loan with Inter Milan and Dutch side Vitesse.