He began his career at Everton and also had a spell at Bristol City from 2018 to 2021 before moving to south Wales.
“Liam’s a super talented footballer, with a great football brain and technically very good. I saw him when he was 16 playing for Everton and thought then he’d go on to a be a real superstar,” said Luton manager Rob Edwards.
“He’s not one who is going to come in and play 90 minutes straight away but he can certainly come on to the pitch, help us get control of the ball when we need it or find that killer pass.”
Walsh helped Coventry City win the League One title during a loan spell in the 2019-20 season and has also spent time at Yeovil Town, Birmingham City and Hull City during his career.
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