Merson, who is based in the West Midlands, claimed that the distance involved was also a barrier, stating: "I enjoyed my time at Portsmouth but the travelling was very hard and I could not see it working out.
"I'm looking forward to playing for Walsall - they play 'total football' which is what I like".
Merson had a year remaining on his contract but Portsmouth have agreed to release him in order to join cash-strapped Walsall ahead of Pompey's first season in the top flight since 1987/1988.