Dr Wollaston, who announced the move late on Wednesday, quit the Conservatives in February over the party's "disastrous handling of Brexit".
The Totnes MP joined what would become the Independent Group for Change, but left that fledgling group in June after its dismal performance in the European Parliament elections.
She now becomes the latest politician to join the resurgent Remain-supporting Lib Dems, following Chuka Umunna's similar pathway from Labour.
Dr Wollaston said: “I believe the best way for me to represent my constituents in Totnes is to be working as part of a fantastic team of Liberal Democrat MPs who are unequivocally making the case for us to remain at the heart of Europe, as well as campaigning for social justice, the environment and our public services.”
Lib Dem leader Jo Swinson said she was “delighted” to welcome Dr Wollaston.
“We have worked together for many months to fight to stop Brexit and, as one of the most respected Members of Parliament, she brings real expertise to our team,” Ms Swinson added.
“As the strongest party for Remainers, we will lead the to stop Brexit.”
Dr Wollaston struck a blow against Theresa May when she left the Conservatives, to help form independent party Change UK, alongside former Tory MPs Heidi Allen and Anna Soubry.
She criticised the Tories’ “shift to the right” of politics, adding: “The final straw for us has been this Government’s disastrous handling of Brexit.
Dr Wollaston, who was first elected in Totnes in 2010, is expected to join Ms Swinson in London on Thursday as she makes her first major fight speech as party leader.