Waldouck, 24, has spent his entire career to date with Wasps having come through the club's academy, helping them secure Heineken Cup success in 2007 and the Premiership title a year later.
But with the club narrowly avoiding relegation to the Championship last term, the three-quarter handed in a transfer request as he wanted a fresh start.
Wasps attempted to convince Waldouck, who still had a year left to run on his contract, to remain at Adams Park.
However, once it became clear the player could not be dissuaded they reluctantly allowed him to leave.
Wasps director of rugby Dai Young said: "We are really disappointed to lose Dom, who we were hoping to play an important role in our squad next season. However, despite our attempts to talk him round, he has been adamant that he needs a fresh start and it wouldn't do any of us any good to keep him here against his will.
"Dom's ultimate aim is to get back in the England reckoning and he feels he needs to be playing for a side competing at the top of the Aviva Premiership and in the Heineken Cup to do so.
"We are looking immediately to fill the gap he leaves in the squad though this is a tough time of year for recruitment. I wish Dom all the best in the future."
Waldouck, who has yet to be capped by England but was in the squads that toured New Zealand in 2008 and Australasia in 2010, added: "This has been a really difficult decision to arrive at but I feel it is right for me at this stage in my career.
"I'd like to thank Dai Young for his support and advice over the last month, and though he may disagree with my decision, I sincerely wish him and everyone at London Wasps the best for the future."