The 25-year-old moved to Molineux in January 2014, helping the club to the League One title that season, and formed an impressive attacking partnership with Benik Afobe and Bakary Sako in the following campaign.
A knee injury kept Dicko on the sidelines for most of 2015-16, however, and after a return of just three goals last term, the Mali international fell out of favour with new Wolves boss Nuno Espirito Santo, dropping behind Leo Bonatini, Diogo Jota and academy graduate Bright Enobakhare in the pecking order.
With Wolves expected to bring in at least one new striker before the transfer window shuts on Thursday, Dicko is thought to have been told he can leave and was the subject of a failed £3m bid from the Tigers last week.
According to the Express & Star, Leonid Slutsky's side returned with an improved offer of £3.5m, which has now been accepted by the Midlands outfit.
Dicko, who scored during Wolves' 3-2 victory over Hull earlier this month, is expected to travel to the KCOM later today to undergo a medical and sign terms.
During his time at Wolves, Dicko made 103 appearances in all competitions, scoring 34 times.