A first team debutant at 16 last season, the midfielder has now penned a first pro deal after turning 17 years of age.
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He made his debut in the UEFA Conference League fixture at Djurgarden, coming on as a substitute before starting the second leg of the semi-final.
The breakthrough made Walsh the third-youngest player to represent Chelsea at senior level.
This season, Walsh made a late appearance in the Carabao Cup win away at Lincoln City and made his Champions League debut at Stamford Bridge, coming on as a substitute in the 5-1 victory over Ajax this week.
