Atletico Madrid striker Matheus Cunha is having a medical at Wolves on Wednesday.
Sportsmail reported on Tuesday that the Premier League side are close to an agreement over a loan deal with an obligation to buy potentially worth up to £40million.
The Molineux club had faced competition from Leeds United, Arsenal and Everton for the Brazilian after initiating talks at the end of last month.
Further positive negotiations this week have swung the deal their way and with verbal agreement now in place, the 23-year-old is expected to be the first signing of Julen Lopetegui's era as manager.