New Fighting Illini coach Bret Bielema picked Walters, who has been Missouri's primary defensive coordinator the past three seasons after two years in a co-coordinator role. Walters joined the Missouri staff in 2015 after stints at Memphis, North Texas, Oklahoma and Arizona.
Football Scoop first reported Walters' move to Illinois.
Bielema also considered Oklahoma State defensive coordinator Jim Knowles, Wofford coach Josh Conklin, Baylor defensive coordinator Ron Roberts and others for the role, according to sources. Bielema hired Appalachian State's Tony Petersen to lead the Illinois offense.
Walters last year received a contract extension through the 2022 season that pays him $900,000 annually. The former safety and captain at Colorado oversaw a top-20 defense in 2019 at Missouri and remained on staff under coach Eliah Drinkwitz.
Illinois and Missouri play an annual rivalry game in men's basketball but haven't met in football since 2010. The teams are set to play a four-game series beginning in 2026.