Bolton boss Gary Megson told the club's website: "He is a player I have admired for a long time. Gary is very talented and at 22 years of age has a very, very bright future ahead of him.
"It is fantastic news that he has agreed to join Bolton Wanderers."
Cahill added: "It is the right move for me to come to Bolton.
"I had a look around their set-up and met with the manager and chairman - and I was impressed with what I saw and heard."