The England Under-21 international has made three appearances for the Baggies this season.
"We have worked very hard on this one and he has had half a dozen teams to pick from," Bolton manager Dougie Freedman told reporters.
"I'm very pleased he's coming to us, and not I would like to point out, for money reasons. The kid feels this is where he would like to better himself."
Bolton welcome Everton to the Reebok Stadium in the fourth round of the FA Cup on Saturday.