The young firm saw off 10 other entries to land the project, ahead of top names such as FAT, Piercy Conner, Popular and Tonkin Liu.
Backed by a private and public sector partnership between the developer, Advantage West Midlands, Walsall Regeneration Company and Walsall Metropolitan Borough Council, the scheme will be Querkraft's first commission in this country.
Urban Splash chief executive Jonathan Falkingham said: 'We chose Querkraft because of its imaginative response to the building. Its initial idea is to create a bar and restaurant space and marry the beauty of the original building with contemporary modern interventions.'
Falkingham added: 'By holding a design competition and inviting a diverse range of emerging European architects, Wharfingers Cottage is guaranteed to be given an ambitious transformation.
'All of the designs submitted were of the highest calibre, which is a great compliment to the Walsall Waterfront development.'
The practice is now working up its plans and a planning application is expected to be submitted by the end of the year.