The experience has led the Academy Award-nominated actress to re-evaluate her workload and step back from projects.
Walters, 69, told the BBC's Victoria Derbyshire that she visited her doctor after suffering from a number of symptoms, including indigestion, stomach pain and vomiting.
It was during the filming of her latest film, The Secret Garden, that Walters was told a CT scan had revealed abnormalities in her intestine, leading specialists to fear she had cancer.
"I was still thinking, 'That's ridiculous, he must have made a mistake'. I couldn't believe it," Dame Julie said.
She remembers, still in shock, the moment she told her husband Grant Roffey the news.
"I'll never forget his face. Tears came into his eyes."
And while Walters is now cancer free, she’s admitted the diagnosis has made her reassess her workload. When asked if The Secret Garden could be her last film, she said it was possible.
"It would have to be something I'm really engaged with [to take another role on].
"I'm not saying I'll never act again. But I certainly don't think I can go back to [a film that requires working] six days a week, five in the morning till seven o'clock at night."
Walters has been nominated for two Academy Awards — for her supporting roles in Educating Rita and Billy Elliot — and also played Molly Weasley in the Harry Potter movie franchise.