Wallace placed through the injury most of this season after getting hurt against Tulane in Week 4.
With an estimated recovery time of four to six months, Wallace will miss spring drills but is expected back for fall practice.
The procedure is similar to one performed on former Oklahoma quarterback Sam Bradford after his career with the Sooners.
Wallace finished the season 235 for 368 passing (63.9 percent) for 2,994 yards, 22 touchdowns, 17 interceptions. The touchdown passes are the most since Jevan Snead’s 26 in 2008 and the fourth-most in school history.
Wallace, a sophomore from Pulaski, Tenn., won the the Conerly Trophy, which goes to Mississippi’s top college player.