The 24-year-old, who joins until the end of the season, was of interest to sides in the Championship but arrives at S6 to bolster a position in which they already have long-term Owls Joe Wildsmith and Cameron Dawson.
Owls boss Darren Moore made no secret of his desire to bring in a new goalkeeper.
The existing pair split duties throughout the club’s busy preseason schedule but the 47-year-old has seen fit to strengthen after the exit of long-serving stopper Keiren Westwood on a free transfer.
Peacock-Farrell, a former Leeds United stopper and made the move across the Pennines in 2019 after Wednesday’s Yorkshire rivals brought in Spaniard Kiko Casilla.
He made 28 appearances as they reached the Championship play-offs in the 2018/19 season and although he comes in as the youngest of the club’s three goalkeepers has experience beyond his years, having made 21 international caps for Northern Ireland.
Then seen as one of the brightest prospects in the EFL, he has since made four Premier League appearances for the Clarets but became available after they brought in former Crystal Palace man Wayne Hennessey as competition for sometime England man Nick Pope.
The likes of Birmingham City were interested in bringing Peacock-Farrell to St Andrews, but he joins Dennis Adeniran, Olamide Shodipo, Jaden Brown and Jack Hunt as the club;s new signings.
Wednesday are also hoping to be able to announce a third loan signing of the summer, that of Middlesbrough midfielder Lewis Wing.