Wolves have appointed Stale Solbakken as their new manager and he will take over on 1 July.
The Norwegian, who was sacked by Cologne last month, will be officially paraded as Mick McCarthy's permanent successor next week.
Solbakken, 44, who played for Wimbledon during the 1997-98 season, had held talks with the club on Thursday.
Terry Connor, who took over following McCarthy's dismissal, is expected to be retained on the coaching staff.
"I am delighted to be taking up the important challenge to manage Wolves," said Solbakken.
Chief executive Jez Moxey confirmed that the new manager would be formally introduced to the media on Monday.
Connor will manage the team for the final game of the season against Wigan on Sunday, completing the agreement made when he took on the position in February.
BBC Radio 5 live's Pat Murphy said that the decision to employ Solbakken was a gamble.
"Solbakken has only got brief experience of the Premier League having played a handful of times for Wimbledon. Terry Connor is going to stay to ensure continuity. Wolves think that is important as Stale Solbakken finds his feet in England."
Solbakken moved into coaching just a year after being "technically dead" when he suffered a cardiac arrest in a 2001 training session while playing for FC Copenhagen where he was coached by England manager Roy Hodgson.
Following the Norwegian's recovery, he returned to the club in 2006 as manager and led them into the last 16 of last season's Champions League, as well as five league titles in six years.
Solbakken's success earned him a move to the Bundesliga with Cologne, but he was replaced by his predecessor Frank Schaefer shortly before the club were relegated from the German top flight.
The ex-midfielder won 58 caps for Norway as a player and represented his country at the 1998 World Cup and Euro 2000 finals.
Wolves' relegation from the Premier League was confirmed at the end of last month.