Mutch, 23, signed for QPR from Cardiff City last summer in a deal believed to be worth around £6m, but he's already left Loftus Road.
The former Birmingham City youngster had started just six Premier League games for Harry Redknapp's side this season, with just 519 minutes of action under his belt.
A January departure is still something of a surprise, but Mutch has completed his move to Selhurst Park in a deal believed to be worth £4.75, which could rise to £5.75m through add-ons according to the Daily Mail.
Mutch will now join new manager Alan Pardew at Selhurst Park, and will add competition for places in midfield for the Eagles.
Mile Jedinak, Joe Ledley and James McArthur are already established players for Palace, but Mutch will add some quality depth for Pardew.
Meanwhile, QPR have funds to go out and sign another player before Monday's deadline, with a striker no doubt on Redknapp's shopping list.
Recouping most of that £6m fee is a great deal for QPR considering that Mutch is regularly on the sidelines, but Redknapp can't afford to make any similar mistakes.