The club will expand the Sir Jack Hayward training ground to incorporate land currently occupied by the nearby St Edmund's Catholic School, which is moving.
Wolves are also investing in a £6million football academy on the school site, including indoor and outdoor pitches.
The club are required to upgrade the facilities under new plans for academy football development announced by the Premier League.
Wolves owner and chairman Steve Morgan said: "These plans will support the club's aim to create a world-class football academy.
"With the introduction of the new Premier League academy system, the club needs to make a significant investment in its facilities to ensure it's not left behind.
"We want to be at the forefront of these Premier League developments, giving our talented local youngsters the best possible chance to progress within a world-class facility."