The move comes after talks between the ex-North Ferriby United target man and Bluebirds chairman Paul Casson.
Wilson’s term at Holker Street has been littered with different injuries and this season the player has found the travelling from his Sheffield home to and from training in Lancaster extremely tiring.
It was with regret from both parties that a parting of the ways was the best way forward for all concerned.
Wilson joined Barrow in July 2014 on an undisclosed fee from North Ferriby following two excellent seasons, but was plagued with knee injuries requiring operations throughout the campaign.
A further knee operation in July this year limited his availability until late September, but since then a groin injury curtailed his FA Cup appearance at AFC Fylde which was to prove his last for the Bluebirds.