Freedman leaves the fourth-placed London side, who are just two points off leaders Leicester City, and will take charge of Bolton’s trip to Middlesbrough on Saturday.
A Crystal Palace club statement read: "Crystal Palace Football Club can confirm that first team manager Dougie Freedman has joined Bolton Wanderers.
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The Eagles have announced that assistant manager Lennie Lawrence and first-team coach Curtis Fleming will be in charge for the match at Barnsley on Tuesday night.
Bolton sacked Owen Coyle following a disappointing start to the Championship season, after being relegated from the Premier League in May, which has left them in 11th place.
Steve Parish, chairman of Crystal Palace, believes the prospect of managing in the Premier League was a large trigger for the switch, before revealing Steve Coppell is a potential replacement for Freedman.
He told Sky Sports News: "I certainly don't feel betrayed. He had a very good offer on the table from us, I felt. I don't feel Dougie is somebody who's hugely motivated by money – he certainly didn't give me the impression we could fix it with money, I think it could be more about ambition.
“I think it came down to him believing that his ambition was greater than ours. There is an element of this I don't understand.
"The last four days I haven't spoken to anyone. Steve [Coppell] is certainly someone I will speak to – somebody we will be consulting and is a possibility."