The 24-year-old has been expected to finalise his switch to Molineux after it emerged yesterday that the midfielder was in talks with the newly-demoted Championship club.
"I am really happy to have signed for Wolves," said Sako. "It is important for me to be joining such an exciting project. I have always wanted to play in England because I believe that English football suits my style."
Wolves manager Stale Solbakken added: "I am very pleased that we have completed the deal to sign Bakary. He can play on either side and also in behind the striker and has a great left foot which is something we are missing now in attack."